Multipolarity: Gold’s Most Fundamental Driver Now?

It seems, for decades, as though the world has become an increasingly complicated place, geopolitically speaking. And now, with what experts say is a clear trend toward global multipolarity, where the worldwide order no longer is shaped by the U.S. alone, that complexity could be poised to grow even further. One of the implications of a truly multipolar world, numerous strategists suggest, may be exposure of the economy, markets, and investors to even greater uncertainty and volatility.

Not that markets and investors need any more reasons to feel less stable right now.

It practically goes without saying that the ongoing tariff drama, including the almost-daily uncertainty that now surrounds U.S. tariff and trade policy, is a particularly acute market stressor right now.

So are many of the current economic metrics and data. This week, we learned that a key inflation measure, the core consumer price index, came in at 3.1% last month. And while that’s a tenth of a percentage point slower than January’s figure, the fact that core CPI continues to struggle to fall below 3% after nearly four years of higher inflation underscores the challenge of fully — and finally — reining it in.

Higher interest rates, which remain elevated precisely as a function of inflation’s persistence, are a headache. As long as inflation stays “sticky,” you can reasonably assume that uncomfortably high interest rates will stick around, as well.

Consumer confidence is not in the best shape, either. Last month, one of the country’s most widely followed sentiment metrics, The Conference Board’s Consumer Confidence Index, saw its biggest drop in more than four years.

And there’s this: the Federal Reserve Bank of Atlanta’s widely followed forecasting model of economic output, GDPNow, currently projects the economy will contract by 2.4% this quarter.

Against this backdrop, the S&P 500 has declined by 8.5% since the beginning of February through Thursday, while the tech-laden Nasdaq Composite has tumbled by nearly 12% over the same period.

Some good news is that gold, for its part, has been behaving the way many might expect — and hope — it would in such volatile conditions: gold has managed to climb about 2.5% since the beginning of February.

In addition to real-time, highly dynamic economic and geopolitical drivers, America’s deteriorating fiscal outlook is being credited by many observers with aiding gold’s upward momentum right now. In fact, as I detailed last week, one renowned money manager recently suggested the federal government is so dangerously burdened that a U.S. debt crisis could be just a handful of years away.

Shift in Global Power Dynamics to Multipolarity Appears to Be Underway

But it turns out that as potent as readily apparent economic and fiscal drivers may be in supporting gold, perhaps the metal’s most powerful and most foundational driver right now is something else altogether. In the assessment of numerous analysts, the real energy source behind gold’s strength over the last several years is a profound change in the global economic and geopolitical order.

What I’m referring to here is a shift in global power dynamics; a shift to a world that is no longer geopolitically unipolar or bipolar, but is instead multipolar, where there’s no longer one or two nations so dominant that they exclusively generate the narrative by which the rest of the world operates.

Polarity refers to the distribution of power and influence throughout the international system. Many would suggest that the global order before this was bipolar, dominated by the U.S. and the Soviet Union, from the end of World War II until the latter met its demise in 1991. From that point forward, it is commonly held that unipolarity has prevailed since that time, with the global order largely revolving around the singular dominance of the U.S.

More recently, however, there has been ample evidence of an erosion in that U.S. dominance — and not by one singular nation, but by multiple countries.

Many nations, frankly, no longer seem interested in buying what Uncle Sam is selling. As non-Western nations continue to grow not only in population but in economic market share, their tolerance of a world that is led by the West … and the U.S., in particular … clearly is diminishing.

Western-Rival BRICS Bloc Now Accounts for Nearly Half of Global GDP

The rise of the BRICS bloc (named for charter members Brazil, Russia, India, China, and South Africa) is a particularly shining example of the shift to global multipolarity. Formed in 2009, with the intention of serving as a rival to the West’s G-7 (Group of Seven), the bloc, which now is made up of a total of 19 nations (members and partners), now represents roughly 55% of the global population and 46% of GDP (gross domestic product).[1]

Even the newly minted U.S. Secretary of State, Marco Rubio, suggests a shift to multipolarity is basically a foregone conclusion, as he seemed to make clear in a recent interview with former Fox News host Megyn Kelly:

So it’s not normal for the world to simply have a unipolar power. That was not — that was an anomaly. It was a product of the end of the Cold War, but eventually you were going to reach back to a point where you had a multipolar world, multi-great powers in different parts of the planet. We face that now with China and to some extent Russia, and then you have rogue states like Iran and North Korea you have to deal with.[2]

So, what does a shift toward multipolarity have to do with gold?

What Are the Properties of Gold that Make It Appealing to Sovereignty?

Many of gold’s inherent characteristics make it conducive to serving in a role of outsized importance on the global monetary stage at a time when many nations have developed an acute interest in buttressing their sovereignty.

Of all the features and properties that make gold appealing, there are three, in particular, that can make it an ideal safe-haven asset and medium of exchange for sovereign nation-states:

• Liquidity. The universal acceptance of gold — as well as its readily accessible global markets and reliable, consistent value — make it a highly liquid and therefore highly transactable asset.

• Lack of counterparty or credit risk. This means the value of gold cannot be harmed or diminished because any party to a transaction involving gold fails to perform in some way.

• Political neutrality. This is especially key for nations that have a particular interest in fortifying their sovereignty. Settling international transactions and otherwise being beholden to the currencies of foreign countries may be risky for some nations. Among the most prominent examples of this risk in recent history is the decision by the U.S. and other Western nations to immediately freeze $300 billion — roughly half — of Russia’s central bank reserves held in their currencies upon Moscow’s invasion of Ukraine in 2022. Because gold ultimately is a highly physical asset not issued by any country, access to the metal cannot be impeded by prevailing electronic payment systems controlled by any nation or group of nations.

These features of gold can be of particular interest to countries that wish to remain less vulnerable to sanctions and other constraints potentially imposed by nations … particularly the U.S. … whose currencies regularly are used to settle international transactions.

And for any nation that owns gold, the totality of the metal’s properties can raise the level of confidence in their own domestic economies and official currencies.

More analysts now are connecting the dots from the apparent shift to greater global multipolarity and stronger gold prices over the longer term. In a few minutes, we’re going to see what two prominent strategists have to say about the possible relationship.

As you might imagine, the implications of this potential trend for individual investors could be significant — an increasingly multipolar world that increasingly relies on gold as a monetary asset implies increasing stature and relevance for gold on the world stage. And one result of that, of course, could be even greater resilience in gold prices.

Let’s take an even deeper dive into all of this.

Central Bank Gold Demand Projected to Exceed 1,000 Metric Tons for the Fourth Consecutive Year

Central banks are buying more gold than ever before. And if one seriously ponders why those institutions really are buying all that gold, it makes sense to attribute it … as a number of strategists do … to the shift toward geopolitical multipolarity around the world.

First, let’s look at the numbers when it comes to central bank gold demand, which have been both extraordinary and revealing.

According to the World Gold Council:

• Central banks have been net purchasers of gold every year since 2010.

• Central bank gold demand in 2022, 2023, and 2024 has been at or near all-time highs.

• Gold demand among central banks is projected to exceed 1,000 metric tons for the fourth straight year in 2025.

For some time, analysts have suggested that de-dollarization is a principal motivator of central bank gold demand, at least among some of the institutions. To the degree that it’s true, however, it’s worth recognizing that de-dollarization itself really is a function of increasing multipolarity. Those nations that lower their exposure to the dollar really are doing so to create a larger global footprint and enhance their own sovereignty on the world stage.

But overt anti-Western de-dollarization is not the only catalyst of greater gold interest amid a shift toward multipolarity. For many nations, stockpiling gold is a way to inspire greater confidence — among friend and foe alike — in sovereign economies and currencies.

Take Poland, for example … the single-biggest buyer of gold among central banks in 2024. Poland actually has a relatively good relationship with the U.S., so the country likely isn’t as concerned with diversifying away from the dollar as other nations might be.

And that could be part of the reason why Poland now is so aggressively buying the metal; as a way to bolster its stability and sovereignty at a time when the geopolitical winds are shifting and it’s becoming increasingly unclear which countries ultimately may come to have the greatest standing on the global stage.

Poland’s Top Central Banker: National “Prestige, Financial Security” Improved by Owning Gold

As Adam Glapinski, president of the National Bank of Poland (NBP), said late last year:

The purchases of gold conducted by NBP have not only increased the prestige of the Polish central bank, but also improved the financial security of Poland, which is particularly important in the face of the current tense geopolitical situation.[3]

Similarly, the National Bank of Hungary, which was the 8th-biggest gold buyer among central banks in 2024, said in a statement last September:

Amid increasing uncertainty … the role of gold as a safe-haven asset and a store of value is of particular importance, as it enhances confidence in the country and supports financial stability.[4]

As is the case with Poland, Hungary actually enjoys a particularly good relationship with the U.S. right now, so an explicit concern with dodging potential U.S. sanctions likely isn’t as much of a motivator for its embrace of gold. However, ALSO like Poland, Hungary likely recognizes that the shift to a more multipolar world may mean less geopolitical certainty … and also recognizes the benefits of owning gold in such circumstances.

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As global multipolarity has become more of a talking point recently throughout the macro geopolitical forum, so too has the relationship between multipolarity and gold become more of a talking point among precious metals strategists.

So, what are they saying?

Multipolarity and Related Gold Demand Triggered by “Undoing of Globalist Agenda”: Strategist

One metals strategist who has multipolarity — and its potential implications — very much on his mind is Willem Middelkoop, chief investment officer of the Commodity Discovery Fund, a mutual fund focused on precious metals mining companies.

During a recent visit to the 2025 convention of the Prospectors & Developers Association of Canada in Toronto, Middelkoop discussed what he sees as a significant period in history right now, one in which global society is in the process of moving from a U.S.-centric worldview to one much more geopolitically diverse.

During his appearance in Toronto, Middelkoop contended that world is moving from a “unipolar world centered around the dollar to a multipolar world,” a notion for which, of course, it seems there’s some evidence.[5] Interestingly, Middelkoop goes a step further, suggesting this shift is somewhat preordained.

The strategist says the timing of this current shift coincides with the generational outlook of economist and demographer Neil Howe, who believes the U.S. operates in sociopolitical lifecycles lasting roughly 80 years (Howe says the previous cycle ended with World War II, which saw the shift to a largely U.S.-centric worldview).[6]

Middelkoop believes the Trump era plays an outsized role in “undoing the globalist agenda” which he says is a driver of this change to a more multipolar world.[5]

As for the role that Middelkoop sees gold playing in all of this, he believes that central banks and institutional investors are turning to gold precisely because of the risk of greater geopolitical distress that increased multipolarity could facilitate.

“You have these institutional investors who never invest in gold unless there’s a smell of war in the air,” Middelkoop said. “Well, we have that, as well, so I think the demand for gold will stay very strong.”[5]

Axel Merk, founder of Merk Investments, a gold-focused asset manager, anticipates one of the consequences of greater multipolarity to be a need for greater deficit spending by more nations charged with the responsibility of providing for their own security as well as enhancing their infrastructure.

“The U.S. is no longer playing the role of global police force, and while that has created some issues, there have also been positive side effects for the global economy,” Merk said recently. “But right now, we have entirely new power dynamics coming to the surface. It’s going to be a more volatile era. It’s going to be an era that’s less efficient. It’s going to be an era with more deficits.”[7]

Merk believes gold is poised to benefit in this new climate, as a safe haven from not only the increased and more overt geopolitical risks associated with the shift to multipolarity, but also the greater fiscal risks associated with such a shift:

It’s difficult to say how everything will unfold, but I believe one of the reasons why people have been buying gold is precisely because of these risks. This demand doesn’t guarantee that prices will keep going up, but an increasing number of people definitely want to have a little bit of gold for ‘insurance.’[7]

Numerous strategists see the theory of a multipolar world and a shift to it as something that could intensify geopolitical risk as well as result in higher levels of sovereign debt. Safe-haven assets such as precious metals seem ideal tools for use on behalf of the effort by central banks and sovereign wealth funds to hedge against the potential impacts of such conditions.

Multipolar World Could Increase Relevance of Precious Metals for Individual Investors, as Well

For individual investors in precious metals, it’s reasonable to consider the relevance of an ongoing shift to a more multipolar global profile.

Perhaps the most obvious is that as nation-states — either directly or via their central banks — continue to aggressively accumulate gold as a way to help hedge against the potential impacts of increased multipolarity for the metal, that could prove to be an important source of price support. Central bank gold buying, particularly at the record levels at which we’ve seen it recently, has been credited by numerous analysts as an important source of ongoing price support. And better gold prices are better for gold investors, obviously.[8]

But the other issue is that the multipolar global condition that even greater uncertainty and volatility than we’re seeing even today … as well as a less predictable and traditional world order, overall … could be conditions and circumstances against which prudent individual investors may seek to hedge against in their own portfolios. And, fundamentally, there’s no reason to believe that the same properties of gold that nation-states seek to access for the benefit of their own holdings would be any less beneficial to individual investors who wish to protect their personal portfolios.

In fact, says Axel Merk, referencing the great fluidity that characterizes the global order right now:

The winner is the sophisticated, diversified investor because in a traditional portfolio allocation, nothing is a completely safe asset.[7]

Gold’s properties as a highly liquid, politically neutral safe-haven asset free from counterparty risk means it could help drive the shift to global multipolarity while simultaneously benefiting from that shift. That so many modern nations are relying on one of the world’s oldest assets as a way to help ensure their economic stability and national independence amid the turn to a multipolar world could be viewed as highly ironic. But investors might be well served by not allowing themselves to become sidetracked by the apparent novelty of that circumstance. Instead, they might instead recognize the positive implications that potentially could accrue to them by including gold — a fundamentally uncorrelated asset that lives outside the mainstream — among their own holdings.

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