A weaker dollar, which is being hedged by foreign investors, suggests diminished confidence in US economic management. The surge in gold underscores that fear, as investors (including other central banks) seek protection against both future US inflation and systemic monetary instability.

Are we witnessing the end of dollar dominance? For decades the US dollar has been at the centre of the global financial system. While its dominance has previously been questioned, it has never come close to being displaced. Now, however, 2025 might be the year when the "exorbitant privilege", as said former French finance minister Valéry Giscard d'Estaing, begins to erode. Two of the defining trades of this year -- the dollar's slide and the resurgence of emerging markets -- point to shifting tides in global finance.

The first story of 2025 is the dollar itself. The Bloomberg Dollar Index, which tracks the greenback against a basket of major currencies, has fallen almost 10% this year to date.

This is its sharpest drop in almost two decades. The decline is broad based, given that the currency has sold off against all other major currencies including emerging markets. The rand is 8% stronger against the dollar so far in 2025.

Against the traditional inflation hedge of gold, the drop is even more extraordinary; according to Bloomberg data, the US dollar is down 30% against bullion.

Oddly, this sell-off in...