In investing, “Buy low, sell high” is among the most well-known sayings, and generally, it’s good advice. But with gold still holding near its historic all-time highs, central banks led by China are bucking the classic adage and smash-buying more, buying the top to fortify themselves against a global monetary and financial blow-up.
With gold hitting yet another awe-inspiring all-time high in the wake of Powell’s remarks reassuring markets (more or less) to expect rate cuts in 2024, a few analysts are pointing out risk factors for a correction — so is there really still room to run?
Last month, the BRICS economic bloc extended invitations to six new members, including Saudi Arabia. What are the ramifications of this expansion? That remains to be seen.
But as Ron Paul pointed out, it could further erode the West’s economic power, and ultimately threaten the status of the dollar as the exclusive global reserve currency.
At its recent summit, the BRICS economic bloc announced it will add six new members, including Saudi Arabia. Many people believe the growing influence of BRICS could ultimately dent Western economic power and undermine the dollar’s role as the world’s reserve currency.
Many people frame the rise of BRICS as a battle between East and West, but economist Patrick Barron said it’s more fundamental than that. It’s actually a war between diametrically opposed economic ideas.
The BRICS economic bloc announced it will add six new members, including Saudi Arabia. The growing influence of BRICS could ultimately dent Western economic power and undermine the dollar’s role as the world’s reserve currency. In this episode of the Friday Gold Wrap, host Mike Maharrey talks about the ramifications of BRICS expansion, de-dollarization, and the possibility of a BRICS currency. He also talks about how silver is inexcusably low.
The sell-off in precious metals which started in late July continued this week, but its momentum slowed with silver even showing a modest gain on the week so far. In early European trading, gold was $1892, having traded down to $1885 yesterday, for a net fall of $19 on the week. Silver was $22.78 having traded down to $22.30 on Tuesday but is up just 10 cents from last Friday’s close. On Comex, turnover in the gold contract was subdued, but in silver it was moderate to healthy.
Globally, further falls in consumer price inflation are now unlikely and there are yet further interest rate increases to come. Bond yields are already on the rise, and a new phase of a banking crisis will be triggered.
This article looks at the factors that have come together to drive interest rates higher, destabilising the entire global banking system. The contraction of bank credit is in its early stages, and that alone will push up interest costs for borrowers. We have an old-fashioned credit crunch on our hands.
Dollar doubts continue to grow, threatening the greenback’s perch at the top of the global financial system.
Last week, Kenyan President William Samoei Ruto suggested that African nations should shift away from using the dollar in intercontinental trade.
China and Brazil recently finalized a trade deal in their own currencies completely bypassing the dollar, but that’s not the only bad news for the world’s reserve currency.
Last week, a Russian official announced that the BRICS nations are working to develop a “new currency,” yet another sign that dollar dominance is waning.
Russia’s gold holdings have topped 1,800 tons.
To put that into perspective, between 2000 and 2007, the Russian central bank held just 400 tons of gold. At that point, the country launched an aggressive gold acquisition program. In October of this year alone, the Bank of Russia bought 21.8 tons of gold. At 1,801 tons, the yellow metal now accounts for 17.3% of the country’s reserves. In the second quarter of 2017, Russia accounted for 38% of all gold purchased by central banks. Russia ranks sixth in the world in gold holdings behind the United States, Germany, Italy, France, and China.
Russia’s growing gold hoard is helping to establish economic and political stability and independence for the country.
