---
title: "The Return of History: Deutsche Bank on Gold, the US Dollar, and the Future of Money"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/285826366.md"
description: "Deutsche Bank AG believes that the unipolar structure, free trade, and low-inflation conditions that drove US dollar reserve hegemony have reversed. The US dollar's share of global central bank reserves has fallen from over 60% to 40%, while gold's share has nearly doubled in the past four years to 30%. If emerging markets raise their target gold allocation to 40%, the gold price could rise to $8,000 within five years. Gold may signal that a new monetary order independent of the US dollar system is brewing"
datetime: "2026-05-10T02:22:33.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/285826366.md)
  - [en](https://longbridge.com/en/news/285826366.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/285826366.md)
---

# The Return of History: Deutsche Bank on Gold, the US Dollar, and the Future of Money

Gold is reclaiming the status it once lost.

This week, Deutsche Bank AG's latest research report pointed out that the various conditions that established the US dollar's reserve status in the 1990s—unipolar hegemony, the expansion of free trade, economic stability, and low inflation—have quietly reversed.

The US dollar's share of global central bank reserves has plummeted from a peak of over 60% to 40%, while gold's share has nearly doubled in the past four years, climbing to nearly 30%. The gap between the two has narrowed to just 10 percentage points.

**Deutsche Bank AG believes that the share lost by the US dollar has not shifted to other fiat currencies but has flowed almost entirely into gold.** Since the 2008 financial crisis, emerging market central banks have cumulatively purchased over 225 million troy ounces of gold, exceeding the total volume sold by developed economies in the 1990s.

In simulation calculations, Deutsche Bank AG believes that **if emerging market central banks raise their target gold allocation to 40%, even if foreign exchange reserves shrink to $5 trillion over the next five years, the gold price could still rise to $8,000 per ounce.**

The more profound implication is that the physical gold accumulated by emerging markets may be the prelude to a future monetary order independent of the US dollar system.

## The Return of History: The US Dollar Cedes Ground to Gold

Deutsche Bank AG defines the current situation as "the return of history," meaning that the "end of history" declared by historian Francis Fukuyama in 1989 is being reversed.

At that time, the United States established its undisputed global hegemony, trade globalization expanded rapidly, central banks in developed economies competed to sell gold, and emerging markets accumulated large amounts of US dollar-denominated foreign exchange reserves.

Deutsche Bank AG pointed out that **the decline in gold's share of global central bank reserves** did not occur when the Bretton Woods system collapsed in 1971 but **stemmed from the comprehensive establishment of US hegemony after the fall of the Berlin Wall in the 1990s.**

**At that time, US inflation was under control, there were fiscal surpluses, the independent central bank system was mature, and US Treasury bonds offered both liquidity and positive yields, making them highly attractive compared to gold, which pays no interest and incurs storage costs.**

Central banks in many European countries, including Switzerland, the United Kingdom, Belgium, the Netherlands, and Austria, successively sold gold and reached the Central Bank Gold Agreement in 1999 to coordinate reductions.

Meanwhile, foreign exchange reserves in emerging markets grew about ninefold between 1990 and 2007, with the vast majority held in US dollars, significantly diluting gold's relative share.

Today, this logic is running in reverse. The report identifies three core driving factors:

> -   Emerging market central banks are actively increasing their gold holdings;
> -   Central bank gold purchases are pushing up gold prices, creating a positive feedback loop;
> -   And the scale of foreign exchange reserves in emerging markets may begin to structurally decline.

The convergence of these three forces means that the upside potential for gold remains considerable.

## Emerging Markets: The Main Force in Gold Buying and Reshaping Reserve Structures

Emerging markets are the absolute core of the current global restructuring of gold reserves.

**Data shows that by the end of 2025, central banks in emerging markets held 367 million troy ounces of physical gold, while central banks in developed economies held 712 million troy ounces.** The former is approximately 52% of the latter, whereas this ratio was about 20% before the 2008 financial crisis.

Looking at gold as a percentage of total reserves, the disparity is even more pronounced. **By the end of 2025, gold accounted for 34% of total reserves held by central banks in developed economies, compared to only 16% for emerging market central banks.** The report believes that this gap indicates that emerging markets still have huge room to increase their holdings.

**Noteworthy is the regional distribution and accelerating trend of gold purchases.**

Although nearly half of the gold holdings of emerging market central banks are concentrated in China, Russia, and India, middle powers such as Turkey, Kazakhstan, and Saudi Arabia are also significant holders.

Even more noteworthy are Eastern Europe and the Middle East and North Africa region: Since the Russia-Ukraine conflict, more than half of the gold reserves of the Czech Republic and Poland have been purchased in the past four years; Middle Eastern and North African countries such as Qatar, Egypt, and the United Arab Emirates have also acquired 25% to 50% of their total holdings in recent years.

Deutsche Bank AG's research also reveals a geopolitical pattern. **Emerging market countries with closer ties to Western defense systems have lower gold reserve ratios; countries with deeper defense ties to China and Russia have significantly higher gold ratios.**

Analysis based on SIPRI arms import data shows that emerging market countries importing more than one-third of their arms from the "Eastern Bloc" (China and Russia) have a gold share in reserves twice that of countries with low defense ties.

**The report infers that if more countries diversify their defense dependence on the United States, it will logically correspond to a decline in US dollar reserves and a rise in gold reserves.**

## Geopolitics Reshapes Reserve Logic: The Impact of Weaponizing the US Dollar

**Deutsche Bank AG views the freezing of approximately $300 billion of Russia's foreign exchange reserves by Western countries in 2022 as a watershed moment accelerating the global reassessment of US dollar reserve risks by central banks.**

Physical gold can be stored domestically, unaffected by sanctions or asset freezes, a characteristic that has become a core consideration for emerging market central banks. Both Russia and China keep all their gold reserves within their own borders.

From a broader macro framework, the era of the "Great Moderation" has ended. US inflation has consistently exceeded targets over the past five years, the independence of monetary policy is being questioned, and the fiscal path is causing market concern.

The report also points out that the United States is withdrawing from free trade and traditional alliance systems. **The previous logic was: The US was happy to accept the outsourcing of manufacturing from emerging markets, while emerging markets were happy to outsource security and savings to the US.**

**This pattern is reversing.** Countries in Asia and the Gulf region are increasingly valuing strategic autonomy in energy and defense, which may require using previously accumulated US dollar reserves to build their own capabilities.

Citing reports, the report notes that the United Arab Emirates has applied to the US Treasury for currency swap arrangements, indicating that demand for US dollar liquidity is emerging, and savings in Gulf countries may be mobilized for post-war reconstruction and domestic defense construction.

## Gold Price Scenario Simulation: Could Touch $8,000 Within Five Years

**Deutsche Bank AG assumes that for every 1 million troy ounces of gold purchased by emerging market central banks, the gold price will rise by approximately 1%.**

****

Based on this, the report calculated gold price trends under different scenarios.

**In the most baseline scenario**, if emerging market foreign exchange reserves remain at the current level of about $8 trillion, and central banks set their target gold allocation at 40%, the gold price will be significantly higher than current levels.

**Even if emerging market foreign exchange reserves shrink to $5 trillion,** **if central banks simultaneously promote gold buying to raise the gold share to 40%, the gold price could still rise to about $8,000 per ounce.**

The specific logic is: With foreign exchange reserves of $5 trillion, gold would need to reach a market value of about $3.3 trillion to achieve the 40% allocation target.

**At the current pace of central bank purchases of about 10 million troy ounces per year (based on IMF data), an additional purchase of about 52 million ounces would push the gold price to about $7,977, corresponding to a five-year purchasing rhythm.**

**The only extreme scenario for a price decline** assumes that emerging market foreign exchange reserves shrink significantly to $2.5 trillion.

At that point, the existing stock of gold held by emerging market central banks at current prices (about $1.7 trillion) would already be close to the 40% allocation target, leaving little motivation for additional gold purchases, and thus eliminating upside price potential.

In addition, the report specifically points out that official gold purchase data tracked by the World Gold Council, which includes sovereign wealth funds, shows an annual purchase volume of more than 3,000 tons, three times the figure shown by IMF central bank data.

This means that actual official gold buying strength may far exceed commonly cited figures, and the potential boost to gold prices will be correspondingly amplified.

## Gold and the Future Monetary Order: Possibilities Beyond the US Dollar

Deutsche Bank AG further analyzes whether the physical gold accumulated by emerging markets signals that an alternative monetary order independent of the US dollar system is brewing?

The report points out that the historical alternation between fiat money and asset-backed money is not accidental; the cycle of financial order is normal. At the beginning of the Bretton Woods system, the United States endowed the US dollar with credit using its gold reserves, which accounted for more than 70% of the global total.

**The report believes that if other countries seek to enhance the international status of their currencies, turning to gold backing also has inherent logic.**

Gold has a monetary history of over 2,500 years, is not the liability of any country, and its above-ground stock grows at an annual rate of about 2%, lower than the expansion speed of fiscal deficits in most countries, giving it unique anchoring value in an environment where fiscal discipline is questionable.

According to research by the independent think tank OMFIF, BRICS countries are exploring the creation of a common currency partially linked to gold and partially linked to member currencies.

According to media reports at the end of 2025, a "BRICS Unit" backed by an equal combination of 40% physical gold and 60% BRICS fiat currencies has entered the pilot stage.

The report emphasizes that this "unit" has not yet become official policy for BRICS countries and is currently more at the conceptual exploration stage.

The report concludes by citing a highly symbolic piece of data: **In 2025, the total value of global above-ground gold stocks exceeded the total size of US tradable Treasury debt for the first time in 40 years.**

****

In other words, gold as an asset class has surpassed the world's primary safe-haven asset in volume.

History has indeed returned.

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