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Gold as Currency of Last Resort?

  //stocks-investing.news-articles.net/content/2026/01/31/gold-as-currency-of-last-resort.html
  Published in Stocks and Investing on Saturday, January 31st 2026 at 7:36 GMT by Seeking Alpha
      Locales: UKRAINE, TAIWAN PROVINCE OF CHINA, RUSSIAN FEDERATION, SAUDI ARABIA, IRAN (ISLAMIC REPUBLIC OF), UNITED STATES, ISRAEL, CHINA, GERMANY

Gold: Beyond a Safe Haven - A Currency of Last Resort?

Historically, gold has functioned as a traditional safe haven during times of crisis, and the current environment is no exception. The devaluation of the Ruble following the imposition of sanctions on Russia following its invasion of Ukraine triggered a rush towards gold as investors sought to preserve wealth. However, the role of gold in the present crisis appears to be evolving beyond simple portfolio diversification. We're witnessing a potential return to gold as a currency of last resort, particularly amongst nations seeking to bypass traditional dollar-dominated financial systems. Central banks, notably those in countries increasingly aligned against Western powers, are accumulating gold reserves at unprecedented rates, signaling a desire for financial independence. This trend, coupled with persistent inflationary pressures globally, suggests gold's upward trajectory isn't merely a response to fear, but a long-term recalibration of international finance.

Beyond investment demand, industrial applications of gold - particularly in electronics - continue to underpin its value. While often overshadowed by its monetary role, this demand provides a stable base for pricing and ensures consistent consumption.

Oil: The Enduring Geopolitical Leverage

Oil remains inextricably linked to geopolitical machinations. The disruptions caused by the Russia-Ukraine war undeniably demonstrated the fragility of the global oil supply chain, immediately impacting prices and creating energy security concerns across Europe. While the world continues to discuss transitioning towards renewable energy sources, the reality is that oil will remain a vital resource for decades to come. This continued dependence bestows significant power upon oil-producing nations, and current tensions in the Middle East, particularly surrounding Iran, further exacerbate the volatility. The possibility of disruption to oil supplies through the Strait of Hormuz, a critical chokepoint, looms large.

OPEC+'s ongoing production cuts, coupled with sustained underinvestment in new oil exploration (driven partially by ESG pressures and a shift towards renewables), are intentionally constricting supply and pushing prices upwards. This isn't simply market forces at play - it's a deliberate strategy by certain nations to exert economic leverage. The question isn't if oil prices will remain elevated, but how high they will climb in the face of ongoing geopolitical instability.

Semiconductors: The New Battlefield for Technological Supremacy

The global chip shortage of 2020-2023 served as a stark wake-up call, exposing the profound dependence of modern economies on semiconductors. These tiny components, vital to everything from smartphones and automobiles to military equipment, became a focal point of international competition. The concentration of semiconductor manufacturing in Taiwan - and the inherent geopolitical risks associated with that concentration - spurred a global scramble to onshore production.

The US CHIPS Act, the European Chips Act, and similar initiatives in Asia represent massive government investments aimed at bolstering domestic semiconductor industries. This isn't simply about economic competitiveness; it's about national security. The ability to design and manufacture advanced semiconductors is now considered a strategic imperative. This renewed focus is driving innovation, attracting investment, and fostering a new era of competition in the semiconductor space. While building new fabrication facilities ("fabs") is incredibly expensive and time-consuming, the long-term implications of these investments will be profound, potentially reshaping the global technology landscape and reducing reliance on single points of failure.

A Connected Future: The Interplay of These Resources

The interplay between gold, oil, and semiconductors is more significant than it might initially appear. Oil powers the manufacturing processes for semiconductors, while semiconductors are crucial for the infrastructure underpinning modern financial systems, including those used for gold trading. Gold, in turn, offers a potential hedge against the economic shocks caused by oil price volatility or semiconductor supply chain disruptions. Understanding these interconnectedness is vital for navigating the complex global landscape. Investors and policymakers alike must recognize that these resources aren't isolated assets - they are integral components of a tightly woven global network, and their future performance will be inextricably linked.