The gold standard of distrust: Why central banks are hedging against a shaky global order

While headlines are dominated by trade wars, AI arms races, and geopolitical brinkmanship, central banks—those typically silent stewards of monetary stability—are voting with their vaults. And their vote is crystal clear: gold, not dollars, is the enduring currency of trust.

For the third year in a row, more than two-thirds of central banks believe global gold reserves will increase in the next twelve months. This is not a sentiment born of optimism.

It is a strategic hedge—an unmistakable signal that monetary authorities are bracing for sustained political instability, weakening trust in the US dollar, and a fragmented multipolar future.

The US dollar remains dominant, but its overuse as a political weapon—from sanctions to tariffs—has introduced a new risk premium to holding it as a reserve asset. As the World Gold Council survey shows, nearly 30% of central banks cite geopolitical risks as a key driver of their decision to hold more gold. For many, the post-2022 financial order—where dollar access can be revoked at will—has become intolerably unstable.

While the West views sanctions as policy tools, the Global South and parts of Europe increasingly interpret them as signs of hegemonic overreach.

The return of President Donald Trump, with his open disdain for multilateral institutions and unpredictable tariff policies, has only intensified this sentiment. The very idea that sovereign wealth could be frozen—much like Russia's reserves were in 2022—has sent shockwaves through capitals from Ankara to Jakarta, from Riyadh to Brasilia.

One of the least discussed but most symbolic developments is the continued effort by European states—especially Germany and Italy—to repatriate their gold from the US Federal Reserve. This is no mere accounting adjustment. It is a signal of fading transatlantic trust and a precaution against the future weaponisation of custodianship.

Gold repatriation isn’t new, but its resurgence in 2025 is profoundly geopolitical.

It reflects not just anxiety about American politics, but a broader re-evaluation of risk in an era of systemic disorder. The Bundesbank’s earlier move to bring home 300 tonnes of gold from New York and Paris set the precedent.

Now others may follow. Should France or the Netherlands act similarly, it could mark the beginning of the end of the US’s role as the global gold custodian.

For ASEAN states, the message is even more sobering. The region’s central banks have not traditionally hoarded gold. But this may be changing.

The Philippines, Thailand, and Singapore have quietly increased their holdings, while Malaysia and Indonesia are reportedly studying ways to reduce exposure to dollar-denominated assets.

This is not de-dollarisation in the rhetorical sense championed by BRICS leaders.

It is diversification—a gradual move toward reserve insulation. Gold, unlike dollars or bonds, carries no counterparty risk. It is not subject to sanctions, ratings downgrades, or political pressures. It is sovereignty in metallic form.

As ASEAN seeks to deepen intra-regional trade and reduce overdependence on Western financial systems, gold offers a neutral store of value.

It can underpin bilateral swaps, stabilize currencies during shocks, and bolster confidence in sovereign balance sheets. The World Gold Council data should prompt ASEAN finance ministers to seriously consider gold's role in a regional monetary framework—perhaps even as a hedge within the Chiang Mai Initiative Multilateralization (CMIM).

What emerges from the 2025 survey is not a global flight from the dollar, but a sober reassessment of risk, security, and sovereignty. Central banks are not discarding the dollar; they are diluting its dominance. Gold is not a replacement, but a refuge—especially in a world where interest rates, debt ceilings, and geopolitical stability no longer move in predictable patterns.

Notably, 23% of central banks in emerging markets plan to increase their gold reserves in the coming year—compared to just 6% in advanced economies.

The shift is structural, not cyclical. And it is rooted in the realization that global order is no longer guaranteed by Bretton Woods institutions or G7 consensus.

In their place is a new normal: transactional alliances, short-term security pacts, and national currencies subject to the whims of electoral cycles.

ASEAN, for its part, must not be caught off guard. The time is ripe to establish a regional reserve asset mix that includes gold.

Doing so would signal financial maturity, reduce exposure to future currency weaponisation, and align ASEAN with the broader global movement toward monetary autonomy.

In the past, the world’s central banks were content to hold promises: Treasury bills, dollar reserves, or SDRs. Today, they are demanding collateral. Gold’s resurgence is not nostalgia. It is insurance.

The 2025 World Gold Council survey is more than a report. It is a barometer of global anxiety—and a warning that the future of finance will not be built solely on digits and derivatives, but also on tangible trust.