Middle East conflict and the dollar's waning dominance

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The war with Iran has done further damage to the global dollar system. The demise of the dollar’s dominance won’t be an overnight phenomenon, but the conflict in the Middle East is one more milestone along the way. That can be seen in central bank holdings of gold exceeding valuation-adjusted dollar reserves for the first time in the Bretton Woods II era.

Chart: valuation‑adjusted USD reserves vs gold reserves (2000–2026), showing gold overtaking adjusted dollar holdings.
Bloomberg / Macrobond chart showing valuation-adjusted USD reserves versus global gold reserve assets; gold surpasses adjusted dollar holdings in 2026.

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