The Central Banks of BRICS and other developing countries are on a gold-buying spree while simultaneously offloading the US dollar from their reserves. The World Gold Council reported that BRICS is the largest buyer of gold in 2022, and 2023, and is continuing the spree in 2024. While accumulating gold, BRICS members Russia and China are dumping US Treasury bonds and other assets.
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In 2024 alone, BRICS member China offloaded $53.3 billion worth of US Treasury bonds and accumulated billions worth of gold. Other BRICS countries are following suit but the numbers are smaller compared to China’s dumping of US Treasuries.
BRICS: Gold Glitters, US Dollar Declines
Gold is now the most loved asset in the Central Banks of BRICS nations while the US dollar is being shunned. Egon von Greyerz, the Founder of Matterhorn Asset Management said that this is the “BRICS gold era”.
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Greyerz explained that BRICS countries are increasingly purchasing gold while their Central Banks are dumping US Treasuries in the market. He predicted that a time will come when Central Banks will hold less US dollars and have more gold to protect their economies.
“As we enter the golden era with BRICS countries increasing their purchases continuously and central banks selling U.S. Treasuries to buy gold. No country and no Central Bank will in the future hold dollars as a reserve asset. Physical gold is the only proper reserve asset, just as it has been throughout history,” said Greyerz.
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Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade. The move will have drastic implications on global trade and strengthen local currencies and native economies of developing countries. On the other hand, the US economy will take the first hit and scramble to safeguard its interests.