This past week I’ve been highlighting new research I just put out called “America’s Secret Gold War.”
The gist: global financial powers are trading in dollars for gold in a way we haven’t seen in decades.
Typical monetary moves usually show sovereign states selling one fiat currency to buy another fiat currency.
But over the past 5 years especially, we’ve seen a reversion to countries preferring to hold gold. Gold reserves as a share of sovereign monetary holdings are at ~30 year highs.
And while demand has held steady despite a sustained correction between the end of January and Mid-March, the real story is in China.
For Q1 2026, Chinese demand for gold hit an all-time high…
The project could not be clearer at this point: China is sprinting from the dollar and accumulating as much gold as possible – even at all-time high prices.
The Middle Kingdom has sold off $500 billion worth of U.S. Treasuries since 2011, and now holds the same amount of U.S. debt that it did in 2008. The trend is undeniable: China is slowly selling off about $1 billion worth of U.S. Treasuries a month – unwinding its position without spooking the market.
At the same time, remember: China effectively banned the export of gold and silver. That means that it’s holding on to all of its precious metals production AND buying up production from other countries.
In a sense: it’s using dollars to buy gold from the west. We get our dollars back, they get our gold. Not a fantastic deal for us, to be honest.
The dollar is becoming an Old Maid that no one wants to be holding at the end of the game.
Part of the reason we’re seeing a shift to gold instead of other sovereign currencies is explained by a problem that gold is perhaps uniquely suited to solve.
Think about it this way: if Japan (our ally) dumps U.S. dollars and Treasuries in exchange for Yen, it has the effect of weakening the dollar while strengthening the Yen.
Japan for decades has desperately tried to make its exports competitive by keeping the Yen exchange rate weak compared to the currencies of its trading partners – especially the U.S.
Meanwhile, the Trump administration has made it no secret that he wants a weaker dollar – because he believes a weak dollar is the only path to growth (or inflation) to mitigate Treasury debt.
But if Japan instead buys gold… that move doesn’t have a direct impact on Yen strength or weakness. And holding gold means it can preserve purchasing power “off-currency.”
These sovereign states are still buying gold hand over fist for much the same reason you or I do as individual investors: they don’t have a better alternative and they want to preserve purchasing power, especially in dollar denominated assets.
I provide more information about this important monetary war in my free report: America’s Secret Gold War.
Don’t miss it.
Best,
Garrett Goggin, CFA, CMT
Lead Analyst and Founder, Golden Portfolio
