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Roula Khalaf, editor of the FT, picks her favorite stories in this weekly newsletter.

The author is President of Queens’ College, Cambridge and an advisor to Allianz and Gramercy

Something strange happened to the price of gold last year. By hitting record highs after record highs, it appears to have decoupled from its traditional historical influencers such as interest rates, inflation and the dollar. Furthermore, the consistency of its rise contrasts with fluctuations in crucial geopolitical situations.

Gold’s “all-weather” nature signals something that goes beyond economics, politics and higher-frequency geopolitical developments. It captures an increasingly persistent behavioral trend in China and “middle power” countries and others. And it’s a trend that the West should pay greater attention to.

Over the past 12 months, the price of an ounce of gold in international markets has risen from $1,947 to $2,715, an increase of nearly 40 percent. Interestingly, this price increase was relatively linear, with each decline attracting more buyers. This occurred despite some sharp swings in expected interest rates, a wide range of US benchmark yields, falling inflation and currency volatility.

Some might be tempted to dismiss gold’s performance as part of a broader rise in asset prices that has, for example, seen the U.S. S&P index rise around 35 percent in the past 12 months. But this connection itself is unusual. Others attribute it to the threat of military conflict that has resulted in so many innocent civilians losing their lives and livelihoods, along with massive destruction of infrastructure. But the price trend suggests that much more could happen.

Continuous purchases by foreign central banks have been a key driver of gold’s strength. Such purchases seem to be related not only to the desire of many people to gradually diversify their foreign reserves despite America’s “economic exceptionalism” and thus overcome the dominance of the US dollar. There is also interest in exploring possible alternatives to the dollar-based payment system that has been at the core of the international architecture for some 80 years.

If you ask why this is happening, you will usually get an answer that mentions a general loss of confidence in America’s management of the world order and two specific developments.

They will hear about America’s weaponization of trade tariffs and investment sanctions, along with its diminished interest in the rules-based, cooperative multilateral system it played a crucial role in shaping 80 years ago.

They will also hear about Russia’s ability to continue trading and growing its economy despite some of the country’s banks being excluded from Swift, the international system that governs the vast majority of cross-border payments, in 2022. This was achieved by creating a cumbersome alternative trading and payment system involving a handful of other countries. Although inefficient and costly, this allowed Russia to bypass the dollar and maintain key international economic and financial relations.

Then there is the issue surrounding the conflict in the Middle East, where the US is seen by many as a contradictory supporter of basic human rights and the application of international law. This perception has been reinforced by the US shielding its most important ally from responding to actions widely condemned in the international community.

This is not just about the erosion of the dollar’s dominant role, but also about a gradual change in the way the global system works. No other currency or payment system is able or willing to replace the dollar at the core of the system, and there are practical limits to the diversification of reserves. But more and more small pipes are being built around this core; and a growing number of countries are interested and increasingly participating.

What has happened to the price of gold is unusual not only in terms of traditional economic and financial influences. It also goes beyond purely geopolitical influences to capture a broader phenomenon that is developing secular dynamics.

As it takes deeper roots, it risks significantly fragmenting the global system and undermining the international influence of the dollar and the U.S. financial system. This would impact the information and influence capabilities of the United States and would undermine its national security. It is a phenomenon that Western governments should pay more attention to. And there is still time for a course correction here, although not as much as some would hope.