Central Banks Double Down on Gold as Dollar Demand Weakens -

This week’s Money Metals Midweek Memo podcast, hosted by Mike Maharrey, delivers a sharp and timely analysis of the accelerating global pivot away from the U.S. dollar and the growing strategic importance of gold. 
Maharrey ties together current events, economic indicators, and monetary trends to highlight how central banks are stacking gold while American fiscal policy grows increasingly reckless. 
From silver’s breakout to de-dollarization, the data points to a world quietly moving toward sound money—and away from the greenback.
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<h2>Stanley Cup, Silver, and Real Value</h2>
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The episode opens with a celebration of the Florida Panthers’ Stanley Cup victory, but Maharrey uses this to launch into a deeper point about value—particularly silver’s role in the real world.
The Stanley Cup may be priceless to players, but it’s also made from <a href="https://www.moneymetals.com/news/2024/06/24/hockeys-silver-reward-003274">459.74 troy ounces of silver</a>, giving it a melt value of approximately $17,144 at current prices. The total estimated trophy value is around $650,000. In comparison, the NFL’s Lombardi Trophy—despite the NFL’s bigger commercial presence—has a melt value of just $3,800.
It’s a light-hearted way to re-emphasize a serious point: silver holds real value. When physical silver can account for tens of thousands in value in a single item, it speaks volumes about its utility as money—something fiat can’t match.
<h2>Silver Climbs, Gold-Silver Ratio Shrinks</h2>
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Silver is on the move. It’s holding strong <a href="https://www.moneymetals.com/silver-price">above $37 an ounce</a>, and the next major resistance level sits around $37.50. If silver breaks through that, Maharrey expects a run to $50, its all-time high.
The gold-to-silver ratio is narrowing fast. Just weeks ago, the ratio stood at 103:1. Now it’s around 91:1, meaning it takes 91 ounces of silver to buy one ounce of gold. Historically, that ratio hovers closer to 60:1, and in past bull markets, it has dropped to 50:1 or lower.
Silver is finally playing catch-up. For over a year, investors have wondered why gold was running while silver lagged. Maharrey emphasizes this pattern is typical: silver often lags until later in a bull cycle, then surges ahead. Even now, it remains historically underpriced relative to gold. The discount is real—and the window is still open.
<h2>Oil Jumps, Treasuries Wobble</h2>
Tensions in the Middle East have again put upward pressure on commodities. After Israel's strike on Iran, oil prices shot higher. Gas prices in central Florida jumped from $2.89 to $3.09 per gallon practically overnight.
Gold reacted predictably, rising modestly as a safe-haven asset. But one traditional safe haven didn’t—U.S. Treasuries. Instead of gaining in value, Treasury yields inched up, signaling weak demand.
This is not normal. During past geopolitical crises, investors fled to U.S. government bonds. Now, they’re hesitating. That suggests serious underlying concerns about U.S. debt levels, inflation, and political risk.
It also signals a paradigm shift—the bond market may no longer be the refuge it once was.
<h2>Germany Eyes Its Gold</h2>
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One of the most telling developments in global finance is the renewed focus on gold repatriation. Germany, once content to store part of its national gold reserves at the New York Fed, is now facing mounting internal pressure to bring it home.
The German Taxpayer Federation recently sent a letter to the Bundesbank urging it to repatriate gold, citing U.S. political instability. 
Their warning?
“Trump wants to control the Fed, which would also mean controlling the German gold reserve.”
The Bundesbank has downplayed the concerns publicly, but the pressure is mounting. Gold stored abroad—especially in a country whose fiscal policies are growing erratic—<a href="https://www.moneymetals.com/news/2025/06/08/germans-demand-bring-our-gold-home-004113">poses strategic risk</a>. 
More and more nations are beginning to realize: if you don’t hold it, you don’t own it.
<h2>Federal Deficits Blow Past Trillion Mark</h2>
The May 2025 deficit came in at a staggering $316 billion, the second-largest monthly shortfall this fiscal year. That brings the fiscal <a href="https://www.moneymetals.com/news/2025/06/14/business-as-usual-another-big-budget-deficit-in-may-004130">2025 deficit to $1.36 trillion</a>—and the year isn’t even over.
For perspective, the first trillion-dollar deficit in U.S. history occurred during the Great Recession under President Obama. Today, trillion-dollar deficits are business as usual—even without a crisis.
Government revenue actually increased in May—$371 billion, up 14.7 percent year-over-year. But spending still outpaced it massively, hitting $687 billion. Total federal outlays for fiscal 2025 have already reached $4.85 trillion, up 8 percent from last year.
Maharrey is blunt: the government doesn’t have a revenue problem—it has a spending problem.
<h2>Central Banks Are Buying Gold—Fast</h2>
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Three consecutive years of <a href="https://www.linkedin.com/pulse/survey-indicates-central-banks-plan-keep-buying-gold-money-metals-2amke">central banks buying over 1,000 tons of gold</a> signals something far bigger than a passing trend. In 2022, they purchased a record 1,136 tons, and 2024 was close behind—just 91 tons shy of that all-time high.
In the latest World Gold Council survey, 95 percent of central banks said they expect global gold reserves to rise in the next 12 months. Even more significantly, 43 percent of them plan to increase their own gold holdings—up from 29 percent a year ago.
This is not speculation. It’s a coordinated, global strategy.
Countries like China, Turkey, India, and Poland are leading the charge. And much of their buying, particularly from China, likely goes unreported. What we see officially is just the surface.
<h2>The Dollar's Share Keeps Slipping</h2>
The U.S. dollar's share of global reserves has dropped steadily over the past two decades. In 2002, it made up 72 percent of total central bank reserves. By the end of 2024, that number had <a href="https://www.moneymetals.com/news/2025/06/13/dollar-hits-3-year-low-heres-what-it-means-for-precious-metals-004126">fallen to 57.8 percent—a 30-year low</a>.
<a href="https://www.moneymetals.com/news/2025/04/09/golds-historic-race-to-reclaim-its-role-as-the-preeminent-reserve-currency-003969">Gold has now surpassed the euro</a> to become the second-largest reserve asset globally. That shift is especially notable because the euro’s share has remained steady. It's not the euro that's shrinking—it’s <a href="https://www.moneymetals.com/news/2025/06/13/gold-overtakes-euro-as-second-largest-global-reserve-asset-004124">the dollar being replaced</a>.
Seventy-three percent of central banks now expect their dollar holdings to decline further over the next five years.
<h2>Why They're Buying: Inflation and Sanctions</h2>
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Emerging-market central banks say the top two reasons for buying gold are inflation concerns and geopolitical risk—particularly sanctions and weaponization of the dollar.
Gold is viewed as crisis-proof. It’s an asset that doesn’t rely on another party’s solvency. It doesn’t carry counterparty risk. And it can’t be frozen, seized, or debased.
As central banks fuel inflation through excessive money printing, they’re buying gold to shield themselves from the consequences of their own policies.
<h2>The Implications for You</h2>
The U.S. government relies on global demand for dollars. That demand props up borrowing and hides the inflation created by the Federal Reserve’s endless money creation. But as other countries start rejecting the dollar, those excess dollars will flood back home.
That means higher prices, rising interest rates, and mounting debt service costs.
Maharrey warns that this doesn't require a dollar collapse. Even a modest drop in dollar demand is enough to trigger significant inflation at home. As investors demand higher yields, interest payments on the national debt will soar, forcing even more borrowing.
It’s a vicious cycle—and we’re already inside it.
<h2>Gold Demand Won’t Stop</h2>
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From 2010 to 2021, <a href="https://www.moneymetals.com/news/2025/06/17/survey-indicates-central-banks-plan-to-keep-buying-gold-004131">central banks averaged 473 tons of gold</a> buying per year. Over the past three years, that figure has more than doubled.
This is the largest, most sustained accumulation of gold by central banks since records began in 1950. These aren’t temporary hedges. They’re long-term, strategic shifts in monetary policy.
Even CNBC recently acknowledged that gold is being accumulated by countries concerned about sanctions and the potential erosion of major currencies.
Translation: <a href="https://www.moneymetals.com/news/2025/06/14/why-investors-cant-trust-the-system-and-should-trust-gold-004128">they no longer trust the dollar</a>.
<h2>A Multipolar Monetary System Is Emerging</h2>
We’re heading into a multi-currency world. The dollar will still matter—but less so. Maharrey predicts we’ll see more settlements in yuan, euros, and gold, along with the rise of alternative payment systems and decentralized trade frameworks.
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That doesn’t mean collapse. It means gradual loss of dominance—and that’s more than enough to shake the foundations of U.S. economic stability.
<h2>What Central Banks Know—And You Should Too</h2>
Central banks are hoarding gold for the <a href="https://medium.com/@moneymetalsexchange/why-investors-cant-trust-the-system-and-should-trust-gold-5a8f64aa7c00">same reasons you should be</a>: to hedge against inflation, reduce exposure to fiat risk, and take direct control of your wealth.
If they don’t trust fiat currency and are shifting out of dollars, you shouldn’t either. Gold and silver are the insurance policies against monetary malpractice. They’re the real money in a world drowning in debt.

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