Gold prices rose above **$5,000 an ounce** for the first time in late January 2026, hitting a record high above **$5,100** amid geopolitical uncertainties and safe-haven demand. Additionally, the US dollar weakened to a four-month low, pressured by President Donald Trump’s policy instability, including trade threats, alliance tensions (such as Greenland ambitions), and potential concerns over the Fed’s independence. Analysts are linking this to the growing trend of **de-dollarization**, where Trump’s aggressive tariffs, sanctions and warnings are paradoxically eroding confidence in the dollar.
Central banks around the world are increasing gold reserves as a hedge. The foreign exchange reserves of the **Reserve Bank of India (RBI)** increased sharply in mid-January 2026, led by gold (about 880 tonnes) – its value increased by almost 70% due to the surge in prices, taking the share of gold in the reserves to about 17% (it was 12% a year ago). Although the RBI had made a modest hike in 2025, the increase in prices was beneficial. Globally, the **World Gold Council** reports strong purchases in 2025: Poland leads with 95 tonnes, followed by Kazakhstan (49 tonnes) and Brazil (43 tonnes net in subsequent months).
India’s RBI proposed adding BRICS central bank digital currencies for easier cross-border trade and tourism, in keeping with the agenda of the 2026 summit (which India will host). It is based on 2025 interoperability talks but has not yet been approved, which may anger Washington.
The dollar faces broader challenges: its share of global reserves is set to decline to about 58% in 2024 (according to the IMF), a decades-long decline from 71% in 1999, and is set to accelerate after 2022 following sanctions on Russia. India reduced US Treasury holdings to about $186.5 billion by November 2025 (from $234 billion). China fell to a 16-year low, while some European funds (such as the Danish) are considering divestment due to US policy risks. Non-dollar currencies are increasingly being used in energy contracts.
Trump has warned BRICS against alternatives, and threatened to impose 100% tariffs to protect the supremacy of the dollar. Yet Morgan Stanley and others say his policies could accelerate multipolar shifts. The process of reducing dependence on the dollar is going on gradually, not suddenly, but the rising price of gold and the diversification of reserves show the dollar’s dominance decreasing amid uncertainty.
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