The role of gold in a polycentric world

A Polycentric World Order: “There are decades where nothing happens; and there are weeks where decades happen.” — Vladimir Lenin On 30 January 2025, the U.S. State Department released the transcript of an interview between newly appointed Secretary of State Marco Rubio and journalist Megyn Kelly, in which Rubio openly declared that unipolarity was an […]

A Polycentric World Order:

“There are decades where nothing happens; and there are weeks where decades happen.” — Vladimir Lenin

On 30 January 2025, the U.S. State Department released the transcript of an interview between newly appointed Secretary of State Marco Rubio and journalist Megyn Kelly, in which Rubio openly declared that unipolarity was an anomaly. According to him, the world is inevitably reverting to a polycentric order, shaped not by ideology but by the “gravitational forces of geopolitics.”

This acknowledgement, coming from Washington’s top diplomat, is not merely a statement of shifting alliances; it is a confirmation that the global order is undergoing a fundamental recalibration. In this emerging world, gold stands poised to play a more disruptive economic role than at any moment in modern history.

Gold Revaluation or Dollar Devaluation?

For decades, global financial institutions and Western governments have influenced gold prices as part of a monetary strategy that underpinned the dominance of the U.S. dollar. However, recent market behaviour has defied economic norms.

Since breaking the $2,000/oz threshold in early 2024, gold has continued to set records, climbing above $4,220/oz in late 2025, even as global equities surged to historic highs, gold mining stocks remained stagnant, and major financial institutions projected further growth.

In late 2024, JP Morgan forecasted gold would rise to $3,000/oz by Q3 2025. Instead, gold exceeded that projection by over $1,200, signalling a market disconnect that challenges traditional monetary theory. The 2025 Gold Outlook Report published by the World Gold Council (WGC) confirms that demand may accelerate further due to stronger-than-expected central bank purchases and a rapid deterioration in global financial conditions, favouring flight-to-safety assets.

Central Banks Are Quietly Buying the Future:

Global inflation has eased, interest rates are stabilising, and stimulus programs are winding down, yet central banks continue buying gold at record levels, breaking modern historical patterns. 2022: 1,082 metric tons purchased, 2023: 1,037 metric tons, and 2024: 1,186 metric tons (a new all-time record). This persistent accumulation no longer aligns with inflation hedging alone. Instead, it suggests a strategic repositioning for a post-dollar world.

Yet, at the very moment inflation is reverting to historical norms, monetary policy is easing, and interest rates are falling across much of the world, central banks continue to accumulate gold. By conventional economic logic, this trend should not exist. If modern monetary policy were sufficient in itself as a guarantee of value, states would have no strategic need for metal reserves.

Of course, central banks hoarding gold is not new. For much of the twentieth century, the gold standard formally anchored major currencies, most notably the U.S. dollar. But the unravelling of that system provides a more profound lesson: each abandonment of the gold standard coincided with a moment of financial stress or default by a dominant world power.

Britain was the first to break. As the burden of maintaining a global empire became too great in the aftermath of the First World War, London abandoned the gold standard in 1931. As a result, many central banks and holders of sterling reserves suffered heavy losses; foreign-held pound balances lost value against gold or other hard currencies once convertibility ended.

The United States, confronted with systemic banking failures and deflation during the Great Depression, suspended gold convertibility domestically in 1933 under President Franklin Roosevelt. By Executive Order 6102, Americans were legally compelled to surrender their gold holdings to the Federal Reserve. Soon after, the Gold Reserve Act of 1934 revalued gold upward and centralised all monetary gold under the U.S. Treasury, effectively ending the domestic gold standard and turning dollar convertibility into a tool of state control rather than a free-market guarantee.

Four decades later, the United States faced a different crisis: the international monetary system established at Bretton Woods. With rising deficits, escalating debt from the Vietnam War, and a growing outflow of gold as foreign central banks attempted to convert their dollars into metal, the United States could no longer maintain gold convertibility at the official price of $35 per ounce. In 1971, President Richard Nixon announced the suspension of the convertibility of the dollar into gold for foreign governments, a decision famously known as the Nixon Shock. This action severed the final link between the dollar and gold, transforming the global monetary order into a fully fiat system.

The pattern is unmistakable: gold-based monetary systems are not discarded out of confidence; they are abandoned under the pressure of obligations too large to sustain. And if today’s central banks are quietly returning to gold, it may suggest that another era of unsustainable debt is approaching its limits.

Dollar Fragility and the Global Debt Trap:

What collapsed in 1971 was not gold, but the credibility of the dollar’s promise. With gold convertibility gone, U.S. power shifted from metal backing to financial dominance through debt, trade, and military leverage. The fiat era began not because it was superior, but because gold no longer accommodated the scale of America’s obligations.

Investigative journalist Christopher Leonard notes that between 2007 and 2017, the U.S. Federal Reserve printed more money than had been printed in the previous 500 years of human civilisation. Yet the post-2020 stimulus dwarfs even that. The past five years alone represent the largest monetary expansion in American history.

Governments around the world now face a trilemma: raising taxes risks economic decline, budget cuts are politically impossible, and borrowing is unsustainable.

As U.S. debt levels surge, sanctions extend to more than 30% of the world’s population, and assets like Russia’s reserves are seized, many countries are reducing reliance on the dollar. The trust that underpins Western financial dominance is eroding.

 

The New Gold Scramble in Africa and Nigeria’s Missing Opportunity

In the Sahel, artisanal mining is transforming local economies. Niger, Mali, and Burkina Faso now derive a significant share of export earnings from gold. New gold towns such as Djado and Tchibarakatan are producing a generation of desert millionaires, fuelled partly by capital inflows from West Asia.

While Western narratives emphasise uranium, France’s deeper long-term strategic interest has been control over the Sahel’s gold reserves. With France losing influence, the implications extend beyond geopolitics into the stability of the European banking system.

Despite being West Africa’s economic giant, Nigeria has no gold refinery, nor a coordinated strategy to benefit from geopolitical realignment. Nigerian traders dominate Sahel gold markets, yet the value chain is exported. A bold strategic shift is necessary.

Nigeria must increase gold holdings in reserves, establish regional gold refineries, lead the creation of a West African economic union with harmonised policies, and enable free movement of trade, capital, and services across the region.

The coming era rewards scale, strategy, and sovereignty. A fragmented approach will not survive the turbulence of global debt crises or shifting power blocs.

Conclusion:

The world is entering an era in which the stability of currencies, the legitimacy of debt, and the architecture of global finance will all be contested. Gold is no longer merely a passive store of value; it is emerging as a strategic asset in a new polycentric world order.

Gold’s resurgence reflects a growing scepticism toward debt-dependent monetary governance. What is returning is not the gold standard, but the gold logic of power in a world where promises may soon fail.

In this unfolding world, old alliances will matter less. What will endure are sustained national interests, and these will increasingly define the rules of engagement. In that logic of power, one truth becomes unavoidable: what is unsustainable cannot be sustained.