EDITO :

• Geopolitical crises are upsetting the world monetary order and accelerating de-dollarization, despite the dollar's continuing dominance.

• Gold remains central: central banks have added almost 1,600 tonnes between 2020 and 2024, notably China, Russia, India, Turkey and Poland.

• It represents around 20% of global reserves, becoming the second most important international currency.

• The blocking of reserves (Russia, Venezuela) reinforces repatriation and sovereignty strategies.

• A return to the classical gold standard is unlikely, but gold could become the mainstay of a supranational system, alongside crypto-currencies.

The return of conflicts on an international scale and the radicalization of the major powers are profoundly disrupting the world monetary order in force since the end of the XXᵉ century. While the dollar remains the dominant currency, recent years have seen an acceleration in the dynamics of de-dollarization. Growing political instability in Latin America now spares no region.

What impact have recent geopolitical crises had on the international monetary system? How can we envisage the emergence of a new world monetary order, and should we expect gold to make a comeback on a global scale?

1) Gold: a pillar of central bank balance sheets

Contrary to popular belief, gold continues to play a fundamental role in our monetary system. It has not disappeared from central bank vaults: it is still very much present, and central banks have even stepped up their purchases in recent years. Over the period 2020-2024, central banks have added almost 1,600 tonnes of gold to their reserves, according to the World Gold Council. The main buying countries include :

• Turkey (+222 tonnes) ;
• Poland (+220 tonnes) ;
• India (+200 tonnes);
• Russia and especially China (+331 tonnes).

What these countries generally have in common is a desire to reduce their dependence on the dollar or, in some cases, to use gold as a safe haven in the face of monetary and inflationary imbalances, as in the case of Turkey.

Source

In the balance sheet of the European Central Bank, gold is effectively classified as the "top asset" (yellow curve below). Its proportion on the ECB's balance sheet thus appears relatively stable over the long term. Gold therefore continues to occupy a central position in international monetary strategy. The precious metal is one of the few ways out of an increasingly deaf world.

Even so, gone are the days of the XXᵉ century when money was convertible into sound and trembling metal. Relating the quantity of theoretically convertible money to available stocks of gold, the effective value of the "gold standard" has today shrunk considerably compared with the early XXᵉ century.

However, the end of the gold standard in 1971, which already no longer concerned private individuals, opened up the possibility for every citizen to freely back their assets with the quantity of gold of their choice. We can thus speak of the emergence of a form of "private gold standard".

2) Venezuela: gold reserves blocked in London

This context of international tension is becoming increasingly marked. In addition to the freezing of Russian assets following the outbreak of war in Ukraine, we are now seeing this practice extended to other countries and other forms of sovereign assets, notably gold reserves.

For several years now, Venezuela has been demanding the return of 31 tonnes of gold held in the vaults of the Bank of England in London, blocked due to legal disputes and the lack of international recognition of Nicolas Maduro's government.

This situation is reminiscent of certain historical episodes, such as General de Gaulle's demand in the 1960s for the repatriation of French gold reserves still held abroad.gold reserves still held abroad under the Bretton Woods system, in the interests of monetary sovereignty.

Like the dollar, gold can be subject to sanctions or legal blockages when held in another country. This is why some countries have embarked on policies to repatriate their reserves: Germany, for example, gradually repatriated a large proportion of its gold held in New York, Paris and London in the 2010s, although a proportion still remains in custody abroad. More than a third of Italy's and Germany's gold stocks are still held in New York.

3) Gold is the second most important international currency after the dollar

The sharp rise in the price of gold, combined with the steady increase in stocks held by central banks, has made gold the world's second-largest foreign exchange reserve.world's second-largest foreign exchange reserve, accounting for around 20% of reserves, ahead of the euro (16%) but behind the dollar (46%), which it is now tending to overtake in terms of value.

In addition, the demands of international trade, particularly those linked to globalized production chains in sectors such as technology, require the use of a currency that is universally recognized and not tied to a particular state. In this context, the role of a supranational reserve such as gold is growing stronger as the United States' ability to guarantee lasting geopolitical stability weakens.

Conclusion

This context raises the question of the advent of a new world monetary order. Historically, monetary refoundations often take place following major conflicts redrawing the balance of power.

The gold standard, formalized in the United Kingdom in the early XIXᵉ century, established itself as the reference system with the dominance of the pound sterling until the early XXᵉ century. Conversely, it gradually declined with the assertion of the United States, whose military and commercial ambitions proved incompatible with the constraints of strict monetary discipline.

We are now witnessing a redefinition of the international monetary system. The increase in geopolitical tensions could lead to a new reform in the next five to ten years. However, the growing need for exchange rate flexibility, reinforced by technological progress and the financialization of economies, makes a return to the classical gold standard, considered too rigid, unlikely.

It is more likely that the future of the international monetary system will be based on supranational exchange values, supported by private players, such as gold or certain crypto-currencies, capable of combining exchange security with increased flexibility.