Written by: Bojan Pravica, founder of Elementum
In the first two articles, we showed that central banks around the world are returning to gold and that the volume of these purchases exceeds anything seen in the last fifty years. But quantity alone does not explain the essence of what is happening. The key question is different: who is behind these purchases.
When we look closer, a clear and recurring pattern is revealed. The majority of new gold reserves are not being built in the United States, the Eurozone, or Japan, but in countries outside the traditional Western monetary core. This geographical distribution is not accidental. It reflects deeper changes in the perception of risk, power, and sovereignty in the global financial system.
Western central banks and the status quo paradox
Let’s start with those who are mostly not buying gold today. The US, Germany, France, and Italy have maintained high gold reserves for decades, but they are not significantly increasing them. Their position is specific: they are part of the core of the system that gold indirectly insures.
For these countries, the dollar and euro are not external risks, but their own infrastructure. The US Federal Reserve has no need to reduce exposure to the dollar, as it is the dollar itself. The same applies to the European Central Bank within the Eurozone.
This situation creates a paradox. The very countries that shaped the rules of the monetary order in the past have the least direct incentives to change it today. The status quo still benefits them.
Countries outside the core: different starting points, different logic
For these countries, gold is not a historical relic, but a practical tool. It represents:
- an asset without counterparty risk,
- protection against currency and political risk,
- and a form of monetary sovereignty in a world where rules are often asymmetrical.
It is not surprising that these very countries are leading the process of gold re-monetization today.
China: Long-term strategy without public declarations
China is the most prominent, yet also the most opaque example. Its strategy is not loud or declarative. It is not based on public statements, but on gradual, disciplined adjustments.
China has been reducing relative dependence on the dollar for decades, with gold playing a special role. Not as a replacement for the dollar, but as an anchor of trust in the background of the system. It is important to emphasize: China is not buying gold to destabilize the existing order, but to increase its own resilience in the event of its reshaping.
Its reluctance to disclose actual quantities is not a sign of indecision, but of strategic discipline. In monetary affairs, silence is often more powerful than rhetoric.
- Russia: Forced adjustment that became a lesson
The Russian case is different. There, gold accumulation was not merely a strategic choice, but partly a forced adjustment. After 2014, and even more markedly after 2022, Russia gradually lost access to most Western financial instruments.
In such an environment, gold became one of the few forms of reserves that could not be frozen or restricted. Although the Russian case is extreme, it served as a warning to other countries: what happened to one could, under certain circumstances, happen to others.
- India: Balance between integration and independence
India represents a more subtle case. It is deeply integrated into the global system, yet simultaneously maintains a tradition of strategic independence. Its reserve policy reflects this duality.
Gold in the Indian context is not an expression of distrust towards the dollar, but insurance against one-sided dependence. India understands that access to the dollar is key for trade and finance, but at the same time, it is building a safety net that allows it maneuvering space in a more turbulent world.
- Turkey: Gold as defense against external and internal shocks
Turkey is an example of a country where external geopolitical pressures intertwine with internal macroeconomic challenges. High inflation, currency fluctuations, and strained relations with Western allies have created an environment in which gold has become a key stabilizing asset.
For Turkey, gold is not abstract monetary theory, but a practical instrument for maintaining confidence in the central bank and the national balance sheet.
- Poland and the Eastern European surprise
The case of Poland is particularly interesting. As a member of the EU and NATO, many would place it in the Western core. However, historical experiences and the geopolitical sensitivity of the region have shaped a different view of risk.
Poland has clearly defined gold as a strategic part of its reserves, openly discussing the goal of a higher share of gold in the central bank’s balance sheet. This shows that the issue of monetary sovereignty is not limited only to countries outside the West, but is also appearing on its edges.
Common denominator: Sovereignty, not ideology
If we look at all these examples together, a common denominator emerges. It is not an ideological rejection of the dollar, but a reduction of one-sided exposure. Countries are not fleeing the system – they are insuring themselves within it.
Gold in this context is not a protest, but an insurance policy.
Diversification is not de-dollarization
It is important to emphasize a distinction that is often lost in public debate. Increasing gold reserves does not mean automatic de-dollarization. Most countries still use the dollar as the main transaction currency and a significant part of reserves.
But reserve portfolios are no longer one-dimensional. They are becoming more diverse, more adaptable, and more resilient to political shocks.
Silent coordination without formal agreement
One of the more fascinating aspects of current events is the absence of formal coordination. There is no global agreement on accumulating gold, there is no joint declaration. Nevertheless, many countries are moving in the same direction.
This is not the result of negotiation, but of a similar diagnosis of the world we live in.
Expert View
Founder of the world’s largest hedge fund, Ray Dalio, summarized this dynamic with the following words:
“Countries don’t give up on reserve currencies easily. They do so only when the cost of dependence becomes higher than the cost of change.”
This thought precisely explains why gold is returning to vaults right now.
Conclusion
Accumulation of gold by countries outside the Western core is not a coincidence and not a short-term phenomenon. It is a logical response to a world where economic power, political influence, and financial infrastructure no longer align as smoothly as they once did.
Gold in this process does not forecast the end of the dollar, but the end of its exclusive role. The world is not abandoning the existing system – it is preparing for its evolution.
In the next article, we will address the most sensitive question of this series: how much gold China really has and why official data is likely only part of the whole picture.