Brazil's central bank has doubled its gold reserves to 7.19% of total holdings in just one year, making gold its second-largest reserve asset after the dollar. This strategic shift reflects growing concerns about sovereign debt sustainability and confidence in dollar-denominated assets. The dollar's share of Brazil's reserves has declined to approximately 72%, marking a record low. This move aligns with a global trend where central banks purchased roughly 863 tonnes of gold in 2025. The reallocation demonstrates how geopolitical fragmentation and the weaponization of reserves are driving central banks away from traditional currency holdings toward assets that cannot be printed or frozen. Brazil's gradual approach to reducing dollar dependence mirrors broader capital flow dynamics that will likely reshape global reserve strategies.
