The BRICS alliance has accumulated tonnes of gold worth billions of dollars in its reserves since late 2022. The World Gold Council reported that China is the largest buyer of the precious metal followed by Russia, and India, among others. The massive accumulation led to speculations that the BRICS bloc could back their new currency with gold to challenge the U.S. dollar.
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Nonetheless, the BRICS currency is yet to be formed and has a long way in becoming a reality. Before the currency’s launch, BRICS wants to promote their native currencies for cross-border transactions. Read here to know how many sectors in the U.S. will be affected if BRICS ditches the dollar.
BRICS: Gold Could Replace the U.S. Dollar Soon, Predicts Top Analyst
James Hickman, the founder of Sovereign Man wrote on Peter Schiff’s website that gold could soon displace the U.S. dollar. He mentioned that developing countries, especially BRICS find holding the US dollar in reserves as risky. The risk comes because the U.S. debt has crossed the country’s GDP in 2024. “The US federal debt is a national embarrassment. At $35 trillion, the debt is far larger than the entire US economy and it gets worse every year,” he wrote.
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Hickman added while Americans are selling gold ETFs, central banks of BRICS countries are accumulating it. Therefore, if the U.S. economy dips, holding gold in reserves can help their economies navigate the crash better, as they don’t depend solely on the dollar.
The analyst revealed that major warning signs emerged that gold had a chance to replace the dollar when people in the U.S. began selling ETFs while BRICS countries began buying it. “Individual investors, meanwhile, have been selling gold. Central banks are buying. Individual investors are selling. It seems pretty clear that people aren’t paying attention to the warning signs,” he said.
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“North American investors have sold off more than $4 billion worth of gold ETFs in the first four months of this year, with $2 billion of that just in the month of April. And gold ETF holdings are now at their lowest level in four years,” he summed it up.