Bank of Japan and European Central Bank Side-Stepping the US Dollar.
The Two Beneficiaries are ... Mr. Gold (and his Little Sister) Miss Silver
The European Central Bank is quietly pushing lenders to cut dependence on dollar funding, fearing a Trump White House might weaponize Federal Reserve liquidity tools or destabilize currency markets. This precautionary shift-triggered by memories of Trump’s erratic 2017-2021 policies-is tremendously bullish for gold and silver, as reduced dollar reliance historically coincides with investors flocking to hard assets.
Meanwhile, Japan has been discreetly trimming its $1.1 trillion stash of U.S. Treasuries since 2022, accelerating after Trump’s 2024 tariff threats against Tokyo.
The BoJ’s diversification into euros and gold signals eroding faith in dollar hegemony-a direct catalyst for precious metal demand, since gold thrives when reserve currencies face credibility crises.
Both moves reflect deepening anxiety about America approaching $37 trillion debt mountain and Trump’s potential interference with Fed operations. When central banks lose confidence in dollar stability, they historically stockpile bullion as insurance-explaining why gold hit $3,400/oz recently amid these reports. Silver often rides gold’s coattails in such dollar distrust cycles, particularly as industrial demand for solar tech compounds its monetary appeal.
end of segment
Addendum to this morning’s article
