Whenever geopolitical risks escalate, many turn to gold as the best-known haven for preserving value in times of anxiety and uncertainty.
But this does not cancel out another equally important reality: the dollar also returns strongly in moments of major crisis. The role of each, however, is different. Gold is used mainly as a hedge and a store of wealth, while the dollar is sought because it is the main instrument of liquidity, pricing, and settlement in global trade and finance.
اضافة اعلان
This is clearly revealed by the U.S.-Israeli war on Iran. Despite all the talk about a decline in dollar dominance, major crises continue to show that the global trade and financial system remain structurally organized around it. In moments of shock, the world is not only looking for a safe asset that preserves value, but also for a currency capable of financing trade, settling obligations, and managing daily financial flows. This is a role in which the dollar still holds first place.
The issue is not only about confidence in the strength of the U.S. economy, but also about the fact that the global trade and financial system was historically built around the dollar—from trade and finance to reserves and settlement mechanisms. That is why, when risks rise, the world does not turn into a theoretical alternative but returns to the currency most deeply entrenched in this system.
The numbers reflect this as well: the dollar was on one side of about 89 percent of global foreign exchange trading in April 2025, its share of official global reserves reached about 57 percent in the fourth quarter of the same year, and it continues to dominate the pricing and invoicing of a large share of world trade.
These figures show that the world has not yet succeeded in building real alternatives that would reduce reliance on the dollar. States do not use it because it is the best option in every case, but because it is the most widely used currency within a global financial and trade system whose rules are still built around it. That is why abandoning it, or even reducing dependence on it, remains difficult and costly.
The problem is not only the rise in the dollar itself, but the fact that its cost falls mainly on weaker countries, especially those that import energy and food and are heavily burdened by debt. A stronger dollar raises the cost of imports, debt servicing, and shipping, while weakening governments’ ability to finance social protection. At that point, the issue is no longer merely financial; it becomes direct pressure on prices, wages, job opportunities, and poverty levels.
This is one of the paradoxes of the global economy: war harms growth, trade, and energy markets, yet at the same time strengthens the dollar as a haven. A stronger dollar may not be an unqualified gain for the United States, since it raises the cost of U.S. exports and deepens the trade deficit. But the heavier burden falls on weaker countries, which bear higher imports, debt, and financing costs. This is where the imbalance in the international system becomes clear: those who issue the dominant currency are better able to absorb the shock, while those who depend on it from outside pay a higher price for crises they did not create.
It is true that there are efforts, especially by China and Russia, to expand the use of alternatives to the dollar in payments and trade. But these efforts remain limited and have not yet reached a level that would allow them to compete with it in any real sense. The issue will not be settled by political speech or by the desire to reduce dependence on the dollar. It requires building financial institutions, funding markets, and broad, reliable payment systems capable of performing the role the dollar plays today.
What is needed is not to wait for dollar dominance to decline, but to work to reduce the cost of that dominance on the countries of the Global South by building regional financial arrangements and payment and financing systems that lessen dependence on it in times of crisis. The problem is not the dollar, but an unbalanced global system that forces weaker countries to bear the larger share of the cost. Unless these countries succeed in reducing their dependence on this reality, they will continue to pay the price for crises they did not cause.
