Trump Policy Risks Fuel De-Dollarisation Fears, Push Gold Demand To Record Highs

Trump-linked trade and policy uncertainty is raising the dollar risk premium. That is nudging reserve diversification and pushing investors toward gold again.

Gold’s rally is not just a price story. It is also a confidence story around the US-led financial system. As Donald Trump’s policy style returns to the centre of global risk pricing, investors and policymakers are factoring higher uncertainty around tariffs, sanctions and institutional stability. 

That is feeding a slow but steady shift in behaviour: more hedging, more reserve diversification and stronger appetite for assets that do not depend on any single issuer. In 2025, the numbers turned striking, with record global gold demand and heavy investment inflows.

What Is Driving The Fresh Dollar Anxiety?
 

The de-dollarisation debate is back because the global system is being priced with a higher “policy shock” probability. Reuters reported Bank of Canada Governor Tiff Macklem warning about an “unusual” potential economic shock linked to Trump-style policy risks, including tariff threats and concerns around central bank independence.

At the same time, reserve diversification is visible in official data. The IMF’s COFER update said the USD share of allocated reserves fell to 56.32% in 2025Q2 from 57.79% in 2025Q1, though FX moves explained most of the quarterly change.

The Big Story: How Trump Risk Is Feeding Gold And “Less Dollar” Behaviour 

Gold is reacting first because it is the quickest hedge. Reuters reported global gold demand hit a record 5,002 metric tonnes in 2025, with investment demand jumping 84% to 2,175 tonnes (Reuters, 29 January 2026). Gold also touched $5,300/oz, up 22% year-to-date at the time of the report, after a 64% rise in 2025.

The Financial Times added that gold-backed ETFs saw $89 billion of inflows in 2025, while central bank buying cooled but stayed elevated at 863.3 tonnes (FT, 29 January 2026). Reuters put central bank buying at 850 tonnes for 2025, pointing to the same trend of high official-sector interest even as the pace eased.

Investors are buying protection fast, while reserve changes are gradual but visible in official datasets.

What Changed Earlier: From Quiet Reserve Shifts To Loud Market Hedging?

On the reserve side, the IMF’s later COFER brief put the USD share at 56.92% in 2025Q3, with total reserves at $13.0 trillion.

On the payments side, Reuters reported that BRICS discussions are moving towards interoperability, including ideas around linking central bank digital currencies for cross-border usage. The report also said India’s e-rupee has 7 million retail users since its December 2022 launch. 

And the “weaponisation” argument is gaining volume. Reuters quoted economist Kenneth Rogoff warning that US dollar swap lines could be “weaponised” politically. Investopedia has also tracked how “dollar weaponisation” shapes hedging and diversification discussions.
 

Before moving to voices, a quick timeline helps.

The pattern is consistent. Official diversification moves slowly, while gold reacts quickly when risk rises.

Who Said What: Regulators, Economists, Investors?

Al Jazeera quoted analyst Chris Weafer saying Trump’s “lack of predictability” is pushing investors to question long-held assumptions, also noting US national debt is above $38 trillion.

Reuters reported Germany’s regulator BaFin warning of the risk that markets could question the dollar’s role. The Guardian has also linked the gold rush to geopolitics and hedging flows.

On the official gold side, the World Gold Council’s survey said active gold management rose to 44% in 2025 from 37%in 2024.

From an India retail credit angle, amid high gold prices, LoansJagat explains how this can affect gold loan amounts, eligibility, and overall borrowing decisions. It also notes that many borrowers are tracking such explainers closely right now, as higher gold rates can mean better value against gold but also calls for careful repayment planning.

Conclusion

Gold is surging because policy uncertainty is rising and hedging demand is back in force. De-dollarisation remains gradual, but the incentives to diversify are getting stronger.