Gold Prices Soar as Dollar Declines

Geopolitical tensions and waning confidence in US economy drive shift away from dollar

Published on Feb. 10, 2026

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The US dollar's dominance is declining as geopolitical tensions and waning confidence in the American economy drive a shift toward gold and other currencies. The current gold price has reached an all-time high of over $5,000 per ounce, partly due to high demand and the weakening of the US dollar. This trend has led to a decrease in the dollar's share in global payments and the stability of the international financial system.

Why it matters

The decline of the US dollar's status as a key currency has significant implications for the global economy and geopolitics. It reflects a broader shift toward multipolarity, with countries and investors seeking alternatives to the dollar and questioning the stability of the American economy and the international financial system.

The details

The weakening of the dollar is partly attributed to the fallout from the US trade war, which has primarily stemmed from China's rapid growth and competitiveness. The US has a substantial foreign trade deficit and often issues dollars to avoid placing undue pressure on public debt, leading to an excess supply that has contributed to inflationary pressures. As a result, the dollar's share in international payments has declined, and countries are increasingly shifting toward trading in gold and their own currencies.

  • The current gold price has reached an all-time high of over $5,000 per ounce.
  • The US trade deficit and the need to issue more dollars have contributed to inflationary pressures since the pandemic and the 2008 crisis.

The players

United States

The US is facing a decline in its political and economic power, with the dollar's status as a key currency diminishing due to geopolitical tensions and waning confidence in the American economy.

China

China's rapid growth and competitiveness have made it the world's most competitive economy, generating substantial profits that fund its military, research, companies, and development.

BRICS countries

The BRICS countries, including Russia, Brazil, India, China, and South Africa, have set an example for other countries to shift toward trading in gold and their own currencies, reducing their reliance on the US dollar.

Saudi Arabia

Saudi Arabia has terminated its 50-year-old agreement with the US to trade oil exclusively in dollars, and now also trades oil in Chinese yuan.

United Arab Emirates

The United Arab Emirates has also become a full member of BRICS since 2024, further reducing its reliance on the US dollar.

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What they’re saying

“Confidence in the American economy is waning, primarily because of the fallout from the trade war it initiated and from global political developments.”

— Ahmed Adel, Cairo-based geopolitics and political economy researcher (vtforeignpolicy.com)

“The issue of confiscating frozen Russian assets and using them to fund Ukraine was complex, mainly because international financial institutions opposed such measures. The IMF, the World Bank, and even the European Central Bank expressed strong criticism of it.”

— Ahmed Adel, Cairo-based geopolitics and political economy researcher (vtforeignpolicy.com)

What’s next

The US is seeking to consolidate the dollar's dominance in the Western Hemisphere and sustain its influence, while aiming to remain competitive with other powers and rely on energy, raw materials, technology, and demographics to ensure long-term, sustainable growth.

The takeaway

The decline of the US dollar's status as a key currency reflects a broader shift toward multipolarity, with countries and investors seeking alternatives to the dollar and questioning the stability of the American economy and the international financial system. This trend has significant implications for the global economy and geopolitics, as the US struggles to maintain its dominance in the face of growing challenges.