Impactfull Weekly #10 - Gold: from commodity to dedollarisation champ
Welcome to this week’s edition of Impactfull Weekly, where we analyse strong and weak signals across asset classes, connecting the dots of what we are seeing unfold in the global markets.
Gold is up 50% YTD and has officially breached the $4000/oz threshold in the midst of a rapid dedollarisation of the world order. This extraordinary rally should at the same time impress us and worry us about what’s to come in the near future.
We are currently witnessing in real time, the transformation of gold from a commodity to now back to its old power as the primary asset used to back currencies for global trade. This realignment is the first since Bretton Woods came into play and signalled the start of fiat currency.
This week we dive deeper into this year-long transformation that has begun as global economies start to ask themselves the question of overreliance on the US Dollar as the world’s standard currency and how this in turn affects gold mines and mining companies across continents.
Central banks have accumulated over 1300 tonnes of gold in 2025 alone, with the trend only accelerating further despite record prices. This structural shift creates up and coming opportunities across the gold mining industry to capitalise on this once-in-a-generation monetary transition.
Dedollarisation driven by emerging & established economies
Established economies:
The most profound driver behind gold’s renaissance lies in central banks’ unprecedented buying spree, which has fundamentally altered global reserve composition. Central banks purchased a record 1,240 tonnes in 2024, with 2025 projections reaching 1,300+ tonnes.
This sustained accumulation represents the fourth consecutive year of purchases exceeding 1,000 tonnes, marking the most aggressive reserve diversification since the 1970s.
China’s ten consecutive months of gold purchases through August 2025, despite elevated prices, demonstrates unwavering commitment to monetary diversification. Beijing’s leverage of the Shanghai Gold Exchange to offer custody services for foreign central banks directly challenges London’s historical dominance whilst transforming gold from passive reserve asset into active monetary diplomacy tool.
This buying behaviour transcends price sensitivity, with 76% of central banks expecting global gold reserves to increase over the next five years and 25% planning to increase their own holdings within twelve months. The strategic nature of these purchases reflects deeper structural concerns about dollar dependency and monetary system evolution.
Emerging economies:
The dollar’s share of global reserves has declined from over 70% in 2000 to approximately 58% in 2025, whilst gold’s portion has expanded from 8% to nearly 15%. This trend has accelerated dramatically following the 2022 freezing of Russian central bank assets, which demonstrated the vulnerability of traditional reserve holdings to geopolitical sanctions.
Southeast Asian nations and BRICS members have formalised mechanisms for local-currency trade settlements, reducing reliance on dollar-denominated transactions.
Kazakhstan’s central bank emerged as August’s largest buyer, whilst India’s Reserve Bank, despite reducing purchase frequency to three months out of eight in 2025 compared to near-consistent monthly additions in 2024, maintains gold at 13.6% of forex reserves versus 9.3% a year prior.
During Q1 2025, central banks purchased more than 244 metric tons, significantly exceeding historical quarterly averages. This sustained demand provides a structural floor for gold prices whilst major stablecoin issuers now hold more U.S. Treasuries than countries like South Korea, Germany, and Saudi Arabia, further fragmenting traditional monetary arrangements.
Geopolitical tensions & the Trump world order:
President Trump’s implementation of sweeping import tariffs has escalated global trade tensions whilst increasing investor apprehension about currency stability. The dollar’s steepest annual decline since 1973: falling over 12% in 2025, has fundamentally altered gold’s investment math.
This weakness stems from the disconnect between aggressive fiscal expansion and traditional dollar strength, creating structural headwinds that make gold increasingly attractive as the primary alternative to dollar-denominated reserves.
Geopolitical instability continues driving demand for gold as a ‘safe-haven’ asset, with ongoing tensions supporting continuing higher prices over the short to medium term. The combination of tariff-induced volatility and monetary policy uncertainty has created an environment where gold’s traditional role as a hedge against systemic risk has become more valuable than ever.
$4000/oz and beyond: dissecting gold price drivers
Gold’s H2 2025 trajectory hinges on a critical balance. Volume consumption is facing headwinds as price-sensitive jewellery buyers in India and China postpone purchases or opt for lower-karat options, whilst industrial demand shows marginal growth.
However, central banks continue their strategic accumulation despite the elevated prices, with Poland, China, and Central Asian nations treating current levels as acceptable for their long-term monetary objectives.
Retail investment demand particularly from Chinese buyers who have shifted decisively toward bars and coins over jewellery provides yet another price-insensitive pillar.
The fundamental question for gold’s outlook through 2026 is whether central bank strategic buying and investment demand can sustain prices above $4,000 when traditional consumption patterns adapt to the new pricing environment.
Central banks balancing economics vs. realpolitik:
Eastern Europe & Central Asia
Eastern European nations display the most aggressive gold accumulation patterns, driven primarily by proximity to the Russia-Ukraine conflict.
Poland remains 2025’s largest buyer at 67 tonnes YTD, having increased its target allocation from 20% to 30% of reserves in September 2025.
The Czech Republic aims to double gold reserves to 100 tonnes within three years whilst maintaining 30 consecutive months of purchases through August 2025.
Serbia’s decision to relocate gold reserves from Switzerland to Belgrade following Russia’s asset freezes signals broader European concerns about Western custody arrangements.
Whereas, central Asian nations follow different motivations centred on energy export monetisation.
Azerbaijan’s State Oil Fund (SOFAZ) increased gold allocation from 14.8% to 28.8% of its portfolio, with SOFAZ indicating it may continue purchases depending on market conditions.
Kazakhstan leads August 2025 global purchases at 8 tonnes for the sixth consecutive month, bringing its total holdings to 316 tonnes.
Turkey added 19.5 tonnes in the first half of 2025, maintaining consistent monthly accumulation despite elevated prices.
China & India
China’s gold strategy reflects its strategy of being the vanguard for dedollarisation, accumulating over 2,300 tonnes of gold to date.
Beijing’s parallel development of the Shanghai Gold Exchange custody services for foreign central banks and promotion of yuan-gold trading mechanisms further demonstrates this institutional infrastructure for a post-dollar world order.
On the other hand, the Reserve Bank of India reduced its gold purchases 92% YoY to just 3.8 tonnes in January-August 2025, with gold now comprising 13.6% of reserves primarily due to price appreciation rather than continued accumulation.
India’s reduced gold buying coincides with an increased access to discounted energy from Russia and Iran, which freed fiscal resources for gold purchases in 2024 and earlier this year.
This behaviour reflects India’s delicate position as a net energy importer that cannot afford unlimited reserve diversification whilst maintaining dollar access for essential imports.
Physical Investment
Chinese retail investors
Investment demand for bars and coins rose 24% YoY in H1-2025 to 264 tonnes, accounting for just over half of consumer demand and briefly overtaking jewellery. Futures activity corroborates this shift: SHFE’s share of global exchange-traded gold rose to 31.3% in Sep-2025 (from ~26.9% in Aug), with volumes up 83% MoM.
Ray Dalio says we’re back in the 70s
Ray Dalio was at the Greenwich Economic Forum and commented on gold passing the $4,000 mark:
His take was that a debt glut and persistent fiscal deficits erode the reliability of bonds as a store of wealth, pushing investors toward more neutral reserves like gold. He recommended investors allocate “as much as 15% of their portfolios to gold” whilst comparing the current conditions of our economy to the early 1970s when gold appreciated 5.5x over four years.
Jewellery & Industrials
Jewellery’s share fell from 56% in 2017 to 40% this year, while central bank gold investment went from ~9% to 24% and retail investment from 15% to 29%. India’s symbolic prices of ₹100k per 10g has significantly cooled demand and shifts buyers towards lighter 14/18K pieces, China’s H1-2025 jewellery also dropped 26% to 200t with a similar trade-down.
Industrials have remained relatively stable at about 6-8% of gold demand, with necessity-led investments in semis, medical equipment, renewables, 5G, aerospace, etc. and remains relatively price-insensitive.
Verdict: Gold is already expensive, but it’s still on its way up
Gold has the potential to go up to $6,000-7,000 range due to a multitude of factors interacting with one another:
Structural bid > price: central banks and bar-and-coin buyers are price-insensitive and are still accumulating.
Dollar and deficits: weaker reserve confidence and persistent fiscal gaps keep gold’s monetary premium elevated.
Supply is slow: mine growth is constrained by permitting, grade, capex and ESG; scrap is not filling the gap.
Positioning is not euphoric yet: futures share is rising but ETF ownership is not yet at peak-cycle extremes.
Elastic jewellery acts as a buffer: trade-down today implies pent-up demand on any consolidation.
If the dollar weakens further and central bank buying persists, there is a credible path to $6-7k over the next 12 months. However, if real yields shoot past 2%, or we have a visible pause in official-sector demand, or a disorderly liquidity squeeze we might come back to a base case of $4.5-5.5k.
Companies to Watch
New Gold (TSX:NGD) - By-Product Beneficiaries
New Gold is a Canada-only lever on a falling cost curve. 2025 guidance targets AISC of US$1,025–1,125/oz (by-product) as Rainy River underground ramps and New Afton’s C-Zone adds higher-margin tonnes. Portfolio mine life is about six years; development sustains throughput while Rainy River’s strip declines. The investment case is a self-help free-cash-flow turn in 2025–26 supported by strong EPS growth and lower unit costs. Watch quarterly throughput, dilution, and costs versus the glidepath, plus C-Zone sequencing and Rainy River underground metres. Main risks are execution at both undergrounds, geotechnical behaviour at New Afton, and copper price sensitivity on by-product credits.
Endeavour Mining (TSX:EDV) - West Africa Duration & Growth
Endeavour is a West African operator with visible duration and near-term lifts. 2025 guidance implies AISC of US$1,150–1,350/oz on a steady base supported by the Lafigué ramp and Sabodala-Massawa BIOX expansion. Portfolio depth is a strength: about 10.5 years operating reserve life and roughly 15.6 years including projects. The plan is disciplined capex, incremental debottlenecking and site optimisation rather than price-only torque. Watch Lafigué schedule adherence, BIOX recovery performance and working-capital cadence as builds complete. Principal risks are sovereign and security exposure, diesel and FX sensitivity, and tax frameworks. Governance, cost focus and delivery track record remain the counterweights today.
Alamos Gold (TSX:AGI) - Tier-1 Durability with Organic Projects
Alamos is a Canada-led producer with long life and self-funded growth. 2025 guidance points to AISC of roughly US$1,400–1,450/oz, improving as Island Gold Phase 3 advances while Young-Davidson maintains steady output. Duration is a differentiator: an average life near two decades across Canadian assets, with Lynn Lake extending the pipeline; Mexico adds optionality. The thesis is rising grades and throughput at Island, stable production at YD, and a balanced capex glidepath converting to free cash flow through 2026. Track Phase-3 milestones, Lynn Lake permitting and budget updates. Key risks are Canadian build-cost inflation, underground execution, and Mexican fiscal change.
Our Take:
Gold’s remarkable 2025 performance represents far more than just a cyclical commodity appreciation. We are seeing a new, yet old monetary architecture emerge where gold reassumes its historical role as the ultimate store of value and medium of international exchange. Central banks’ sustained accumulation of over 1,300 tonnes annually, despite record prices, signals a structural shift that will likely persist for years.
While major producers grapple with operational challenges and cost inflation, well-managed mid-cap miners with strong asset bases and disciplined management teams are positioned to deliver exceptional shareholder returns. For value-leaning exposure, New Gold screens cheaply on PEG, guides to low AISC, and has visible, non-price growth from Rainy River underground and New Afton’s C-Zone.
The convergence of dedollarisation trends, geopolitical tensions, and institutional investment creates multiple tailwinds for the gold mining sector. The price path still hinges on two signposts: official-sector demand and real yields. If central-bank buying persists and the dollar weakens further, a $6k–$7k tape is credible; if real yields break higher and official demand pauses, a $4.5k–$5.5k range is our base.
Investors who recognise this structural transformation and position themselves in high-quality mining companies with strong operational metrics and attractive valuations will likely benefit from gold’s transition from commodity to currency-backing asset.
Stay invested, cautiously.
Disclaimer: Thoughts are my own and for informational purposes only. Not investment advice. Does not represent the views or strategies of Impactfull Partners. Not an offer to buy/sell securities or UCITS funds. May hold positions in mentioned assets. Do your own research.