The price of gold has risen to a new all-time high, thanks in part to the efforts of the BRICS Bloc. The alliance’s members have been major investors in the precious metal over the past year, as their new currency is expected to be backed by the metal. In 2024, China has increased its investment in gold, and other BRICS nations have begun to follow suit and push the initiative to move away from the US dollar.
While metals such as gold, silver and palladium have gained in price this week, the US dollar is set for a fourth consecutive week of decline. Gold in particular is up 2.5%, with spot gold trading at $2,487.66 per ounce on Friday morning. US gold futures also rose 1.4% to $2,526.40. Buyers around the world, especially abroad, appear to be following the BRICS nations and investing more in gold than the greenback.
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“Gold rose to a new all-time high after two weeks of extremely choppy trading as bulls finally assert their will,” said Tai Wong, an independent metals trader based in New York. “The $2,500 hurdle is likely to fall soon, however attention will soon turn to Fed Chair Powell’s speech at Jackson Hole in a week, which will provide direction for a more detailed outlook on the upcoming rate cuts.”
BRICS continues to push gold to get rid of the US dollar
According to reports, the BRICS alliance may back its new currency with gold rather than the US dollar or other local currencies. The alliance aims to return to the gold standard and wants to maintain a multipolar world for all trade and transactions. The World Gold Council reported that the BRICS nations have been the largest buyer of gold since 2022. The bloc has amassed tons of the precious metal in its reserves.
Inflation has finally started to slow down, marking a potential turning point for the US dollar. The dollar has struggled to regain lost ground since the pandemic ended. The rise of the BRICS bloc hasn’t done the currency any favors either. More countries than ever are showing interest in the alliance. In fact, more countries are expected to be invited to the bloc’s summit in the fall of 2024. With more countries opting for gold as a hedge against the US dollar, the BRICS de-dollarization mission could peak higher and sooner.
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The worst fear for the US dollar is growing speculation that the country is heading for a recession. Some experts believe that the likelihood of this happening is increasing. A recession would only weaken the US dollar further and strengthen the BRICS countries on the other hand.
