Gold just made its biggest comeback in modern economic history. The ancient metal, long dismissed by economists and dumped by central banks after the collapse of the gold standard in the 1970s, has now climbed to the second most-held reserve asset on the planet—right behind the US dollar. Governments that once sold their gold for decades are now buying it again. And not in small amounts. Over the past three years, net central bank purchases have been over 1,000 tonnes annually, a record pace. That demand pushed gold above the euro in global reserves for the first time ever. The last time central banks held this much gold was back in 1965 during the Bretton Woods system. Trump’s policies trigger dollar doubts Donald Trump’s second term lit the fuse. His trade wars , unpredictable foreign policy, and fiscal blowouts drove investors and foreign governments to question the strength of the US dollar and Treasury bonds. The dollar, once the default haven in global crises, just dropped to a three-year low against the euro and pound. John Reade, chief market strategist at the World Gold Council, didn’t overcomplicate it. “It’s Trump, in a word,” he said . “It’s the risk and uncertainty from the new US administration.” Trump’s “liberation day” tariffs and increasing debt raised concerns over US fiscal discipline. His attacks on the Federal Reserve and US courts have only made things worse. Meanwhile, the price of gold has surged. This April, it hit a new intraday high of over $3,000 per troy ounce, beating the previous all-time high set in 1980. That marked a 30% rise just in 2025. After Israel bombed Iran, investors jumped into gold again, pushing prices close to that peak. For many, this wasn’t just another crisis hedge. It was a full-blown retreat from traditional safe assets like bonds. Central banks in Asia and beyond load up Most of the heavy buying came from countries outside the US and Europe. Central banks in China, Turkey, and India have been leading the charge. These governments are trying to reduce their exposure to the dollar in case they ever face sanctions similar to what Russia dealt with after the Ukraine invasion. Their goal isn’t high returns. They’re simply stacking assets that can’t be frozen, sanctioned, or printed out of thin air. With few other currencies offering enough liquidity or political neutrality, central banks are settling for gold. Oh, but demand comes with problems. When traders rushed to import gold into New York earlier this year over tariff fears, it clogged up the system. At the Bank of England, the world’s second-biggest gold vault, queues to withdraw metal stretched on for weeks. Bank staff couldn’t keep up with the requests. Eventually, Trump clarified that gold wouldn’t face tariffs. The old belief that US Treasuries were the safest place to park reserves doesn’t hold like it used to. Even private fund managers are sounding alarms. A recent Bank of America survey found that 45% of them think gold is overvalued right now—the highest number since 2008. Still, for the second month in a row, gold was called the “most crowded trade” in markets. Everyone seems to be in it, even the skeptics. Kenneth Rogoff, professor at Harvard and former IMF chief economist, said the narrative around crypto replacing gold doesn’t hold up anymore. “People often say bitcoin is the new gold. I say, ‘No, gold is the new gold.’” But not everyone’s rooting for a return to the gold standard. Economists argue that pegging currencies to a fixed asset caused more harm than good during past downturns, including the Great Depression. It limited governments’ ability to react to crises. That’s why even those who are bullish on gold don’t see it replacing the dollar anytime soon. Still, the fear is real. And the demand is real. So yeah, for now, gold is doing what it’s always done best—sit still, stay quiet, and hold its value while the rest of the world freaks out. Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot