(The Epoch Times)—It is not only consumers rushing to the local Costco and neighborhood metals dealer to wipe out their inventories of gold bars and coins.
Since the global financial crisis of 2008–09, central banks have been significant gold buyers, and their investments are paying off. These institutions are striking gold as prices have notched more than two dozen record settlements this year.
The metal has rallied about 30 percent in 2024, rising to as high as $2,708 per ounce. Its sister metal commodity, silver, has also performed well so far this year, surging 32 percent, to $32 an ounce.
Precious metal prices have rocketed on several factors.
Over the last 12 months, the U.S. Dollar Index (DXY), a gauge of the greenback against a basket of currencies, has slumped 3.5 percent. A weaker buck is good for dollar-denominated commodities because it makes it cheaper for foreign investors to purchase.
Despite its recent uptick, the benchmark 10-year Treasury yield has weakened by a full percent since November 2023 on Federal Reserve policy expectations. This has diminished the opportunity cost of holding non-yielding bullion.
Financial markets have witnessed an invasion of gold bugs, bulls that have ushered in precious metal euphoria to the trading floor of the New York Stock Exchange.
But central banks have ostensibly been ahead of the pack.
According to data compiled by the World Gold Council, central banks acquired 1,037 tons of gold last year, the second-highest annual purchase in history. This came one year after the institutions purchased a record high of 1,082 tons.
In August, central banks reported net purchases of eight tons, led by the National Bank of Poland, the Central Bank of the Republic of Turkey, and the Reserve Bank of Turkey.
But while central-bank purchases have significantly increased over the last three years, this has been a long-term trend, says Joseph Cavatoni, a senior market strategist at the World Gold Council.
“It’s a 14-year trend that’s basically been playing out since the global financial crisis,” Cavatoni told The Epoch Times.
“[There] has been a real desire to diversify their holdings and add the component of gold to the portfolio to achieve a better performance outcome.”
Though purchasing sizes have slowed recently, central banks anticipate adding more gold to their reserves in the coming years.
A 2024 World Gold Council survey showed that 81 percent of central banks will increase their gold holdings over the next 12 months. Looking ahead to the next five years, 66 percent of central banks think gold’s share of their overall reserves will be “moderately higher.”
In today’s “increasingly uncertain global economic environment,” the trends make sense, says Matthew Jones, a precious metals analyst at Solomon Global.
“Central banks are increasing their gold purchases as a strategy to diversify reserves, hedge against inflation, protect themselves from geopolitical risks, and reduce reliance on the U.S. dollar,” Jones told The Epoch Times. “Gold’s historical role as a stable and universally accepted asset makes it an attractive option, especially in an increasingly uncertain global economic environment.”
The U.S. dollar hegemony might play a vital role in central banks’ ferocious gold appetite.
Gold in a Reforming Global Monetary Order
Changes to the international monetary order have been unfolding, with central banks gradually transitioning away from the U.S. dollar.
According to the International Monetary Fund’s Currency Composition of Official Foreign Exchange Reserves data, the U.S. dollar share of worldwide foreign-exchange reserves is 58 percent, down from 72 percent in 2000.
“Recent data from the IMF’s Currency Composition of Official Foreign Exchange Reserves (COFER) point to an ongoing gradual decline in the dollar’s share of allocated foreign reserves of central banks and governments,” IMF officials said in a report this past summer. “Strikingly, the reduced role of the U.S. dollar over the last two decades has not been matched by increases in the shares of the other ‘big four’ currencies—the euro, yen, and pound.”
Like gold-buying, the de-dollarization campaign has been ongoing since the Great Recession, kicking into overdrive after the outbreak of the war in Ukraine. This initiative involves countries trimming their reliance on the greenback as a reserve currency.
Leaders have been responding to the potential dollar weaponization, says Vijay Singh, the managing partner and chief investment officer at Regal Point Capital.
After the postwar Bretton Woods conference, the U.S. dollar essentially became the world reserve currency, pegging every other currency to the buck. As a result, the federal government has exploited the U.S. dollar as a tool to bolster Washington’s foreign policy, which was on full display after Russia’s invasion of Ukraine.
The U.S.-led Western alliance froze about half of the Russian central bank’s more than $600 billion in assets. It limited the Kremlin’s access to the SWIFT (Society for Worldwide Interbank Financial Telecommunications) payment system, the financial artery for financial communication.
JPMorgan Chase CEO Jamie Dimon warned that cutting Russia out of SWIFT would trigger “unintended consequences.”
“I don’t think anybody likes to be bullied,” Singh told The Epoch Times. “If you look at a lot of our foreign policy, it does involve kind of using the dollar strength globally against countries that they’re not going to forget.”
Singh says several formal efforts are underway to sidestep the U.S. dollar, including expanding the coalition of anti-dollar developing nations known as the BRICS (Brazil, Russia, India, China, and South Africa).
In August 2023, the group officially invited six other nations to join the bloc: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE), though Saudi Arabia has still yet to join. Nineteen other countries have expressed interest in becoming members.
“We value the interest of other countries in building a partnership with BRICS,” South African President Cyril Ramaphosa said in a statement. “We have tasked our foreign ministers to further develop the BRICS partner country model and a list of prospective partner countries and report by the next Summit.”
A part of the organization’s objective is to bolster bilateral trade settled in local currencies, such as the Chinese yuan, the Brazilian real, and the Indian rupee.
In the last year, many media reports have shown that countries are creating arrangements to complete bilateral trade in local currencies.
Iran and Russia finalized an agreement in December to trade in their local currencies rather than the U.S. dollar, according to Tehran’s state media. Russian Deputy Prime Minister Alexei Overchuk confirmed this past spring that 92 percent of trade settlements between Moscow and Beijing are conducted in rubles and yuan. India and Indonesia inked a deal in March to trade in local currencies.
Over the years, rampant speculation has been that BRICS members would establish a gold-backed reserve currency. To date, nothing has materialized, and experts are skeptical that it will happen anytime soon.
While discussions are likely occurring, “it’s really not a quick” fix to displace the U.S. dollar, according to Cavatoni.
“It’s quite a bit of work to get that done,” he said.
“I think there’s still the necessity for dollars to be in the middle of the mix, and there’s not a lot of viable alternatives to start a new currency, to get something that’s completely independent, to have it embedded in clearing and have it embedded in trade settlements.”
While gold is a politically acceptable instrument to nations outside the Western alliance, there are broader challenges, say State Street economists.
“Gold reserves are simply not ‘user-friendly’ in large quantities,” they wrote in a paper. “Gold needs to be stored domestically and requires an international transaction to convert it into foreign currency for payment purposes.”
“In brief,” they concluded, “gold performs well on safety but falls short on liquidity.”
A more realistic proposal would be tying gold to a stablecoin, Vingh says. This would consist of a cryptocurrency in which the digital asset’s value is pegged to a reference asset, such as the U.S. dollar or gold.
“I think that’s actually more workable, and what they might do,” he stated. “There’s so much flexibility involved with these stablecoins, theoretically.”
The next BRICS Summit later this month will take place in Kazan, Russia, and might rekindle murmurs about de-dollarization and a gold-backed currency.
Gold Prices in 2025
Will gold extend its record run into 2025? Financial experts agree that worldwide markets should brace for elevated prices.
Goldman Sachs Research forecasters prognosticate that gold should hover around $2,700 by early next year, “buoyed by interest rate cuts by the Federal Reserve and gold purchases by emerging market central banks.”
“The metal could get an additional boost if the U.S. imposes new financial sanctions or if concerns mount about the U.S. debt burden,” they said.
“Gold is our strategists’ preferred near-term long (the commodity they most expect to go up in the short term), and it’s also their preferred hedge against geopolitical and financial risks.”
Jones believes gold investors will “enjoy this current bull” entering 2025 and target a spot value approaching $2,800 in early 2025.
Supporting factors will be the same as they have been over the last couple of years.
“I think we will enjoy this current bull run as we enter into 2025 driven by: continued demand from central banks (in particular the central banks from the BRICS nations as they reduce their reliance on the U.S. dollar), persistent or increasing inflation, geopolitical uncertainty (a soft euphemism for war), currency diversification, and the risk of an economic slowdown or recession,” Jones noted.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
