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(Kitco News) – The deglobalization trend that was steadily building over the last decade reached a crescendo in 2025, with the simultaneous breakdowns of post-WWII alliances, international political and military norms, and foundational assumptions underpinning currencies and commodities. According to a recently published special report from Sprott, as the various elements of deglobalization feed into and exacerbate one another in 2026, gold will play an ever-greater role in every dimension of the new world disorder.
“Gold, as a strategic neutral reserve asset, and critical minerals such as rare earth elements, uranium, copper and silver have become geopolitical tools,” wrote Paul Wong and Jacob White in Sprott’s Top 10 Themes for 2026. “Resource-rich nations are leveraging these assets to strengthen bargaining power and attract investment. Mining equities and commodity ETFs are well-positioned to benefit from these structural tailwinds, as demand for these metals and minerals increases in the defense, technology and energy sectors.”
“Deglobalization also accelerates de-dollarization, as countries diversify reserves away from the U.S. dollar,” the authors noted. “Gold is gaining prominence as the globally accepted neutral reserve asset, reinforcing its role as a hedge against systemic risk and geopolitical uncertainty. The global debasement further amplifies the demand for gold.”
“Deglobalization has become a structural transformation and reversal of the market trends of the past several decades, which will define market behavior for years to come,” they said. “We anticipate persistent inflation, elevated geopolitical risk premiums, and a reevaluation of assets such as precious metals and critical minerals, which are tied to sovereignty, security and control of resources.”
This begs the question: Can the current and longstanding historical norm of one global gold price survive in this new environment?
Deglobalization and gold
“The short answer is, I don't really know,” Wong said in an interview with Kitco News. “The one thing I can point towards is, even if the world breaks apart into these power blocks that everyone's talking about now, they're still going to trade with each other. There's still going to be investments, capital flows. That's part of the reason why gold is so attractive to any power block, is that it acts as the neutral reserve currency, meaning that it's a reference price. If you want to trade between block A and block B, there is a reference value, a neutral reserve value that everyone can agree on – or so far, they seem to be agreeing on.”
“It's one of the reasons why gold has been doing so extraordinarily well, and why central banks were buying, and continue to buy,” he added. “I think that's one of the main reasons why the gold price will be agreed upon.”
Wong acknowledged that there could be slight variations amongst exchanges, perhaps a few percentage points of spread. “We've seen the Shanghai gold premium go up and down over the years; that may still occur,” he said. “But I don't think you're going to get a crazy blowout like what we saw between LME and Comex copper pricing – I think it touched 30%. That seems like a really hard stretch.”
“It's more likely that gold will stay as one accepted global price.”
Fiscal dominance and currency debasement
Another key theme Sprott is following for 2026 is the rise of fiscal dominance and the resulting debasement trade.
“The pandemic-era policy mix of greater debt, deficits and stimulus has entrenched fiscal dominance as a structural regime,” the authors write. “In this environment, government spending dictates monetary policy, and central banks increasingly prioritize debt sustainability over inflation control. This dynamic underpins the debasement trade, a secular shift toward hard assets as fiat currencies rapidly lose purchasing power.”
“The debasement trade refers to investor rotation out of fiat-denominated assets and into stores of value such as gold, other precious metals and select commodities,” they explain. “A year ago, the debasement trade was outside of the mainstream, but it has evolved into a structural allocation theme.”
The authors argue that rather than receding in 2026, “the debasement trade is likely to accelerate, reinforcing the strategic case for hard assets in institutional portfolios.”
Mainstream investors are catching on
Asked whether mainstream investors are aware of the debasement trade – and how much of the impending currency debasement he believes is currently priced in – Wong said ordinary investors are beginning to grasp what governments and institutions already have.
“I think investors are realizing, number one, there, there is a debasement trade going on,” he said. “It's called the debasement trade, but I actually don't like the word ‘trade’ in there. It's actually the debasement trend. It's a longer-term secular trend. And it's ongoing. It's developing, it's expanding, it's getting worse. We can see that because of the expansion of debt, deficits, and the pressures that we're seeing on the bond market now.”
Wong pointed to the Japanese bond market as a good example of this. “Their yields are blowing out, the yen is collapsing, the kind of stuff we see in emerging markets – not yet in the states, but you're definitely heading towards that direction.”
“Now, does everyone recognize the debasement trade? Yes,” he said. “But the real question is, are they positioned for it? It seems like they’re not. These types of events only happen once every generation. Most of the time you can get away with just buying the S&P and things are great, and it's been like that for decades. This time around, when something does happen, when the secular trend changes – or regime change, whatever terminology you want to use – typically it takes a while.”
“What are the five stages of grief? Investors are going through that.”
Wong pointed out that even two or three years ago, “only the crazy gold bugs” talked about currency debasement. “But we're starting to get to the point now where I think they're in the acceptance stage. I think they’re just starting to move towards that.”
Gold, however, is a relatively small market: All the money in government bonds can't simply migrate into gold. Put another way, even a relatively small increase in acceptance of the debasement trend would have a massive impact on gold prices.
Central banks go for gold
Asked what happens to gold in an environment where we see a little bit more investor behavior tilting towards debasement as the base case, Wong said we may be seeing it already.
“The big buyers really are central banks,” Wong said. “They're not selling, they're buying.”
“If you pull the chart, your first thought is, ‘Man, this thing really looks overbought.’ Then you go around, you ask investors and most investment funds, and they're thinking, ‘Boy, I wish I could own a little bit more.’ And that's the issue. It’s literally come to the point now where there aren't really any sellers of any real size or duration, and there's a large set of buyers underneath it all, and the trends just keep building and reinforcing the [price] action.”
Wong listed the ongoing drivers that were already in place at the start of 2026: The Russian invasion of Ukraine, the U.S. seizure of Russia’s FX reserves that spooked other central banks, China’s long-term sovereign buying coupled with their still-devastated property market, Trump’s volatile trade wars, the steepening yield curve in developed nations’ economies.
“Then people realize, ‘Oh my goodness, there's a debasement trade going on,’ and that gets stacked on to the previous buying,” he said. “Those are the major ones – there's actually more reasons for buying I didn't mention because it gets a bit too long and complicated – but all these things just start to stack and stack.”
“This is why we've not been able to have a meaningful pullback in gold of any duration,” Wong added. “So far, the longest correction has been about four months, and it was more of a sideways-type correction. That was the summer 2025 correction. Then gold broke from $3,500 to where it is now, $4,800 or more. Again, it keeps going.”
Fragmentation is the future for inventories
Another key theme the authors will be closely monitoring is the fragmentation and disruption of global metal inventory systems.
“The traditional global metal inventory system, built on open trade, efficient arbitrage and centralized warehousing, is breaking down,” they wrote. “Historically, metals flowed freely to regions of highest demand, balancing global inventories through transparent exchanges such as the London Metal Exchange (LME) and the Chicago Mercantile Exchange (CME). Today, this mechanism is fracturing as geopolitical tensions, resource nationalism and tariff walls disrupt the free movement of metals.”
Given that the disruption of inventories we’ve already seen was a byproduct of the rise of ‘resource nationalism’ – which is only growing in influence – Wong said it’s very difficult to know how this fragmentation will play out.
“It really is developing,” he said. “You just look at the direction of where we're heading, and until something breaks that trend of direction, it's probably going to keep going that way.”
Wong warned, however, that all the reasons for the recent dislocations remain in place, and markets are essentially waiting for the next one.
“[Canadian Prime Minister] Mark Carney laid it out: the global order in the state of rupture,” he said. “It's being reset, reordered, no idea how it's going to eventually settle out. Silver, again, is a critical mineral. I think people are just starting to realize how important it is in terms of applications, basically anything. Electronic – AI data centers, anything that requires full electronics, silver’s there, because it’s by far the best conductor on the planet.
“People talk about copper substitution,” he added. “Yes, it's possible, but only to a certain degree.”
Mutually assured destruction in metals
And for those who think the United States holds all the cards in the global rush to secure critical resources, Wong suggests that may not be the case in every area, because there’s a lot that remains to be done after getting the minerals out of the ground.
“China dominates the refining stage,” he said. “If you're the U.S., the bulk of silver refining comes out of China.”
Wong agreed that the United States can't afford to break China's supply chains without effectively breaking their own, because the U.S. can't actually pick up the slack on the refining and manufacturing fronts.
“China got into the dominant position through decades of positioning, decades of investing, and hundreds of billions of dollars. You're not going to reverse that in a few short years,” he said. “You may not be able to reverse it. Who knows? But you're going to try. And along the way, there's going to be all sorts of repercussions, both seen and unseen.”
“It's basically the economic/financial version of mutually assured destruction,” Wong added. “In the Cold War, everyone built a lot of nukes, but no one launched one, because if you launch one, you're both dead. The parallels are somewhat similar.”
“Bottom line is that this will be very expensive,” Wong said. “It's going to demand a lot of commodities if [the major economies] are rebuilding their militaries. The major developed economies are all heavily indebted and it's going to strain balance sheets, it's going to strain debt capacities.”
“The only recourse out is the debasement trade.”
Run-it-hot monetary policy impacts
This brings us to another of the key themes for 2026 and beyond: The impacts of the ‘run-it-hot’ fiscal and monetary policy playbook.
“The combination of fiscal dominance and monetary accommodation sets the stage for a reflationary impulse in 2026,” the authors write. “Traditional hedges lose efficacy as policy deliberately undermines real returns. In this environment, precious metals, real assets, commodities and inflation-linked instruments become favorable allocations in a world where policy-driven liquidity becomes a primary driver of asset prices.”
Historically, one of the biggest drivers of higher gold prices is when markets really wrap their heads around the idea that they are likely to see higher inflation sustained over a longer period of time. The authors argue that we’re entering a period where governments will no longer fight inflation, but will actively embrace it as their only means to manage their massive deficits and massive debts.
What happens when the markets begin to reflect the belief that the last two years of relatively tame inflation is not a return to the norm, but actually the blip, the outlier, and the long-term inflation trend will be significantly higher?
“Oh, I think markets are reflecting that,” Wong said. “In the run-it-hot strategy – with really aggressive fiscal expansion, highly accommodative monetary policies – equities should perform really well: We've seen that equities are performing very well. Debasement trade items are performing very well.”
Bonds are blaring the alarm
“One area that's not performing well is your bond market,” he noted. “That's the thing. You can say, ‘We're going to grow things,’ blah, blah, blah. But one thing you can never say is, ‘Yeah, we're going to inflate our debt away.’ The bond market is aware of it, and the bond market's pretty smart; bond issuance is all at the short end, which is creating its own little stress factors. We saw in the fall that basically there's a lot of funding, stress and short end because basically, if you're financing all you’re getting is short end. You're running some liquidity shortages there. We saw a bit of that happen in September of 2019, that mini-repo crisis.”
“We got another one in the fall of 2025, and that's why we have QE [Quantitative Easing],” Wong said. “I guess they're not calling it QE… what do they call it? Reserve management purchases. So the Fed announced there's $40 billion of reserve management purchases. [00:34:00] So what that is basically it's just excess liquidity. They're going to re-expand the balance sheet in order for the funding markets to function on the short end of the curve. What that means is, at the end of the day, you're printing money.”
“The Fed and Treasury, they won't call it QE,” he said. “But it is still money printing.”
All of this adds up to a long-term high-inflation environment, one that governments actively foster rather than fight.
“We are heading towards that path,” Wong said. “Really, the question is the pace: How fast is inflation going to run?”
Gold stands alone
This leads to another of the authors’ key themes, and perhaps the core thesis that underlies all the others: The inevitable strengthening of gold’s role as an essential store of value.
“In a world of competing currency blocs, persistent deficits and policy codependence, gold stands as a globally accepted store of value,” they write. “While gold's 2026 price action may not match its remarkable 2025 rally, the risk skew remains to the upside, particularly under renewed liquidity waves or geopolitical shocks. While price charts may indicate overbought conditions, gold remains underowned among most investors.”
Wong said that what’s true of individual investors, who save and spend within their own state, it is doubly true of the states themselves, which helps to explain the dramatic surge in central bank gold purchases over the last few years.
“If the world is definitely breaking into power blocks, I need a neutral reserve asset, because I want to trade with block A, B, and C,” Wong said. “I can't trade with only block A; that's dangerous. You need a neutral reserve asset so you can conduct trade. You're going to need neutral reserve assets right now. Gold fits the bill for a lot of different reasons; it just makes the most sense.”
“People are all shocked at how high gold's gone up,” he added. “Maybe you should think about how low the other assets have gone down.”
Pressure builds for Bretton Woods III
In a time of ferocious pursuit of narrowly-defined national interest, one characterized by zero-sum scorched-earth competition instead of win-win cooperation and shared growth, currencies will be weaponized against adversaries – and today’s ally could be tomorrow’s adversary. In this environment, why would any country want to bank on any other country’s currency?
“We're in a chaotic state,” Wong said. “The world is unstable. It's not unpredictable, it's actually unstable. The whole thing is unstable. Everything, politics, economics, monetary systems, social values, social norms, everything is unstable.”
And if the world ends up with no shared and mutually beneficial system to preserve, stability will no longer be the guiding principle of international relations.
“What are you going to do? That's the whole issue,” he said. “We are in a state of flux for everything, and gold is one asset that everyone, especially central banks, sovereigns, all agree on, and now investors as well.”
“What's the best bearish argument on gold?” he asked rhetorically. “The fact it's gone up too much? To me, that's not a great argument.”
Wong said he sees another great monetary reset on the horizon. “Call it ‘Bretton Woods Three,’ call it what you want,” he said. “But we're heading towards that, because as the world breaks up, you're going to need a monetary reserve system.”
“What does it look like? I have no idea,” he added. “All I know is that gold will be part of it. And it will be a bigger part than what it is right now.”
Ernest Hoffman
Ernest Hoffman is a Crypto and Market Reporter for Kitco News. He has over 15 years of experience as a writer, editor, broadcaster and producer for media, educational and cultural organizations. Ernest began working in market news in 2007, establishing the broadcast division of CEP News in Montreal, Canada, where he developed the fastest web-based audio news service in the world and produced economic news videos in partnership with MSN and the TMX. He has a Bachelor's degree Specialization in Journalism from Concordia University.