Central Banks Are Hoarding Gold — Jaspreet Singh Explains What’s Coming for the Dollar

Quick Overview

Central banks are hoarding gold because they are concerned about the declining value of the US dollar, which lost significant value in 2025, prompting countries like China and Poland to seek assets outside of fiat currency; the appointment of Kevin Worsh as the new Federal Reserve Chairman, who favors maintaining Fed independence and potentially higher interest rates, caused immediate drops in gold and Bitcoin prices because investors expected a shift away from the aggressive rate cuts and money printing favored by President Trump.

Key Points: Central banks, including China, Poland, and Turkey, are hoarding gold as a hedge against the weakening US dollar, with 2025 noted as one of the worst years for the dollar in the last decade. The US dollar lost its backing by physical gold on August 15, 1971, when President Nixon took the dollar off the gold standard to avoid defaulting on debts, leading to subsequent inflation eras like stagflation in the late 1970s. President Trump appointed Kevin Worsh as the new Federal Reserve Chairman to replace Jerome Powell (term expiring May 15, 2026), intending to appoint someone who would aggressively cut interest rates and print money for a weaker dollar to boost asset prices. The announcement of Kevin Worsh caused gold and Bitcoin prices to fall sharply because Worsh previously argued against quantitative easing and advocated for higher interest rates during the 2008 crash, signaling a potential return to a stronger dollar. Worsh stated he intends to maintain Federal Reserve independence and suggested managing inflation while cutting interest rates by tightening the balance sheet (removing money from the economy) simultaneously. The US government is taking actions like imposing tariffs on China and considering revaluing its gold reserves (currently valued at $42/ounce on the balance sheet) to $3,000/ounce to increase reported assets and incentivize foreign investment in US Treasuries. Investing opportunities arise from economic shifts, such as the US government building new rare earth mineral supply chains due to tariffs on China, funneling money into previously non-profitable domestic companies.