UBS Calls Dollar "Unattractive" As Gold Becomes A Preferred Reserve Asset

Summary

• The U.S. dollar is weakening, with further downside likely due to deficits and global shifts away from dollar-based transactions.
• Gold has surged as central banks, especially in the Global South, boost reserves, making gold the second-largest global reserve asset after the dollar.
• Geopolitical tensions and sanctions are accelerating the move toward gold and alternative payment systems, reducing reliance on the dollar.
• I recommend investors hedge dollar exposure by allocating 10% of portfolios to gold—split between physical bullion and quality gold mining stocks.

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The U.S. Dollar Index, when measured against a basket of other major currencies, has declined by approximately 10% this year through mid-June and is currently trading at its lowest level in three years.

That’s no small dip, and there may be

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.