Recently, global financial markets have witnessed a massive capital migration. According to the latest data, as the U.S. wages a tariff war against major economies and its economic outlook remains uncertain, wealthy family offices are accelerating their withdrawal from U.S. stocks and bonds, with net divestment hitting a post-pandemic high in a single month. Meanwhile, assets such as Bitcoin and other cryptocurrencies, gold, and emerging Asian market currencies and bonds have become major safe havens, attracting massive inflows, reflecting a rapid surge in investor risk aversion. Market analysts warn that this wave of "de-dollarization" could reshape global asset allocation, with tariff policies becoming a key variable in capital flows.
A Bloomberg report yesterday revealed that due to the unpredictability of dollar assets under U.S. President Donald Trump's tariff policies, some of Asia's wealthiest families are cutting their exposure. One family office managing assets for a Chinese billionaire has completely exited dollar-denominated investments and shifted to Asian markets. A senior executive at one of Europe's largest private banks similarly noted that the scale of recent sell-offs by affluent global clients and institutions is unprecedented in the past 30 years, potentially marking the start of a long-term shift.
Bank Executive Sheds 60% of Dollar Assets
The report also mentioned that an Asian banking executive has slashed 60% of dollar assets from their portfolio, stating that holding cash and gold is safer. Around ten ultra-wealthy family offices and advisors managing billions in assets are also reducing or freezing allocations—primarily in U.S. stocks and bonds—citing reasons such as rapid U.S. policy shifts, uncertainty, and recession risks.
Henry Hau, CEO of Hong Kong-based Infinity Family Office, stated in the report that this is the first time families are seriously considering a partial exit from dollar assets. These families had maintained confidence in dollar holdings during the 1997 Asian Financial Crisis, the 2001 Dot-com Bubble, and the 2008 Financial Crisis. However, they are now planning to reallocate 20% to 30% of their U.S. portfolios to China and Europe.
Gold in Demand
In fact, capital is flowing from dollar assets into various alternative investments. Beyond the relative stability of Asian and European equities, the strengthening of Asian currencies, and the sharp rally in cryptocurrencies, gold has also emerged as a major destination. Spot gold prices edged up yesterday, rising about 0.6%.
A recent J.P. Morgan report further noted that amid global tariff risks and geopolitical uncertainty, gold's appeal as a safe haven is rapidly rising. If institutional investors reallocate just 0.5% of their U.S. assets into gold, prices could skyrocket to US$6,000 per ounce as early as 2029.
Natasha Kaneva, J.P. Morgan's global commodities strategist, highlighted in the report that leading international investors are reassessing the dollar's "exorbitant privilege" and its role as a global safe-haven asset. Although gold accounts for only 4% of global asset allocations, constrained supply growth means even minor reallocations could significantly impact prices.
(Source: Wen Wei Po; Journalist: Chow Siu-kei; English Editor: Darius)
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