Europe's largest asset manager, Amundi, stated that as the dominance of the U.S. dollar wavers, investors are accelerating the reduction of dollar-denominated assets and pivoting towards gold, which stands as the most realistic alternative in the current market environment, with its price rally still having room to continue.
On the 27th, Amundi's Chief Investment Officer, Vincent Mortier, noted in an interview with Bloomberg Television that beyond geopolitical factors, the U.S.'s massive deficit and uncertainty surrounding the Federal Reserve's future policy are also key drivers propelling a large-scale capital shift from the dollar to gold. The firm believes that, over the long term, gold is an effective tool for hedging against currency depreciation and preserving purchasing power.
Mortier specifically emphasized that within the current global foreign exchange landscape, other major currencies are struggling to present effective alternatives to the dollar. He candidly stated that investors currently "probably don't want to buy euros, and the yen is under pressure," making gold the sole alternative choice, a trend that is particularly evident in the asset allocations of their clients.
Driven by this safe-haven demand and asset rotation, the price of gold climbed for a seventh consecutive trading day on Tuesday, after historically breaking through the $5,100 per ounce mark for the first time on Monday. Market data shows that gold prices have surged 85% over the past 12 months, while the Bloomberg Dollar Index has fallen 8.5% over the same period.
The active defense strategy of institutional capital is a key driver. According to a Bloomberg report, Amundi, which manages approximately €2.3 trillion (around $2.7 trillion) in assets, revealed that this "great migration" from dollar assets to gold is primarily led by institutional investors.
Mortier indicated that the majority of the current demand for gold originates from institutional investors such as central banks and sovereign wealth funds. He pointed out:
"We have been allocating to gold for the past two and a half years, and I believe this trend will continue."
In his view, allocating to gold in the current macroeconomic environment is not merely a tactical adjustment but is crucial for hedging against the risk of asset depreciation over the long term.
Geopolitical frictions are accelerating the outflow from dollar assets. Beyond economic fundamentals, geopolitical tensions are also hastening investors' flight from the dollar. Mortier warned that the persistent criticism of traditional allies by Trump, including recent disputes with European nations over Greenland and ongoing tariff threats, will exact a price.
"You cannot bully your allies forever like this," Mortier stated, adding:
"New alliances are beginning to form. The developments in Europe regarding Greenland are very interesting; it shows that under pressure, parties can find new forms of pushback."
It was reported that Canadian Prime Minister Mark Carney sent a similar signal last week at the World Economic Forum in Davos, Switzerland. He openly called for middle powers to act collectively and warned against coercion by major powers. Amundi believes that this growing isolation of the U.S. is convincing many investors to cut their holdings of dollar assets in favor of gold.
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