Gold: Preferred Hedge as Dollar Dominance Declines

Gold is increasingly being viewed as a preferred hedge against the declining dominance of the dollar, according to Agarwood Capital. Factors such as sanction risks, geopolitical conflicts, and uncertainties in U.S. fiscal and political landscapes are driving central banks and sovereign entities to increase their gold holdings. This has created a long-term, price-insensitive structural demand for the precious metal.

While real interest rates and ETF flows primarily influence short-term fluctuations, the plateauing of supply and rising production costs provide medium-term support for gold prices. As a result, gold is likely to enter a long-term upward trajectory, frequently reaching new highs, and serving as a primary asset to hedge against dollar credit and sanction risks.