BRICS Expected to Continue Record Setting Gold Rally

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Source: Twitter

BRICS has led a growing rally around precious metals, primarily gold. The bloc is looking to use gold to back its under-development currency as an alternative to the US Dollar. Each month, the Global Precious Metals MMI (Monthly Metals Index) has risen by 8.25%. However, April has seen an even bigger bull market around the metal.

Reasons behind this latest “gold rush” include inflation hedging, anticipation of interest rate cuts, and geopolitical uncertainty. The rise in Gold is not expected to slow any time soon either, due to interest in the metal by BRICS nations. Russia and China are leading the way in gold investment, however, they are motivating other countries in the bloc to join in.

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Recently, gold prices broke new highs and created a new range. As prices continue to form higher lows, market participants are expecting a rise in volatility. Furthermore, prices are breaking above 2020 levels amid this bullish momentum.

Also Read: BRICS to Develop Its Own Crypto Stablecoin?

Gold’s value is in its liquidity, return characteristics, and resilience amid any significant events or economic downturn. Thus, it serves as a great alternative to the US dollar, something that BRICS is exposing. The People’s Bank of China, for example, is currently driving up the price of Gold by swooping in to buy more supply of the precious metal. The country leads the way for Gold reserves in April 2024.

China increased its gold reserves for the 18th straight month in April. Central banks in newly emerging markets are driving demand for Gold, and China hopes to motivate BRICS countries to continue doing the same. Thus, the ongoing gold rush isn’t expected to slow any time soon, especially as BRICS looks to ditch the US dollar soon for its gold-backed alternative.