Global financial markets are undergoing profound transformations as geopolitical risks intensify and U.S. fiscal deficits continue to rise. In recent years, a growing number of nations and investors have been pursuing "de-dollarization" strategies to reduce reliance on the U.S. currency while exploring alternative safe-haven assets.

A Bank of America research report published Thursday reveals that while the dollar remains dominant in global foreign exchange reserves, its share has declined from 66% in 2015 to less than 58% in the third quarter of 2024. This 8-percentage-point cumulative drop reflects waning market confidence in the greenback.

With the attractiveness of U.S. Treasury securities plummeting—foreign investors are projected to be net sellers of $60 billion in 2024—market participants are seeking alternative safe asset allocations. Gold and non-core currencies like the euro are emerging as new focal points for central banks and investors diversifying their portfolios.

Bank of America notes that three key factors that previously constrained the euro's rise as a reserve currency—eurozone debt crisis risks, negative interest rate policies, and limited government bond liquidity—have now reversed over the past 15 years.

Central banks have been steadily accumulating gold over the past three years, with annual purchases exceeding 1,000 metric tons, making the precious metal the "biggest winner" among safe-haven assets. This trend reflects both heightened expectations for gold and a broader reassessment of traditional dollar-denominated assets. Simultaneously, the euro's stability is drawing increasing attention from monetary authorities worldwide.

These developments have elevated the status of both gold and the euro. Investors are recognizing that exclusive reliance on the dollar may pose significant risks in an uncertain economic climate. Consequently, strategic allocations to gold and euros are becoming crucial considerations in future investment planning.

Amid this complex and evolving market landscape, both institutional and individual investors must remain vigilant to these trends to develop more effective risk management strategies. The accelerating global de-dollarization movement, coupled with the ascendancy of gold and the euro, signals the emergence of a new investment paradigm—presenting fresh opportunities and challenges for financial markets worldwide.