The BRICS economic alliance has undoubtedly influenced a global acquisition of gold, as a host of countries seek to ditch their US dollar (USD) reserves. Indeed, the economic bloc has set out on a de-dollarization plan in order to further promote local currencies. Subsequently, central banks have been purchasing gold at record rates.
According to a new report from Markets Insider, a variety of central banks are seeking to reduce an “overconcentration” of USD reserves. Therefore, these countries have opted to purchase record amounts of the metal. The move aligns with overall BRICS activity throughout the year and the poor performance of the greenback.
BRICS Leads Globe in Gold Acquisition and De-Dollarization
All eyes were firmly fixed on the BRICS annual this summer as the bloc faced its most vital moment. There, the economic alliance welcomed six countries to their membership ranks and discussed key economic ideas. Although the bloc didn’t initiate a long-discussed alternative currency plan, they did further commit to greater de-dollarization.
Now, the BRICS bloc is setting a standard, as they have led a global acquisition of gold as countries seek to ditch their USD reserves. Specifically, a report notes that monetary authorities throughout the globe have purchased 387 metric tons of gold in the first half of 2023. Additionally, the move comes after they purchased 1,083 tons throughout the year.
The trend appears to have no end in sight and is driven by overall BRICS activity. The head of the gold strategy at State Street stated the expectation that central banks will “continue their roles as net purchasers of gold” in the near future.
The BRICS bloc had been linked to gold as the asset backing an alternative currency. Although that plan never came to fruition, it has not diminished the metal’s growing relevance. Furthermore, if the economic bloc does opt to integrate the asset in a similar fashion, the world stands ready to embrace something. The development could turn the tide of the US dollar’s fate.