BRICS Drives Gold Price to All-Time High as Nations Ditch US Dollar

The price of gold has skyrocketed to a new all-time high, in part thanks to the efforts of the BRICS bloc. The alliance members have been key investors in the precious metal over the past year, as their new currency is expected to be backed by the metal. In 2024, China has leveled up its investment in Gold, and other BRICS nations have begun following suit to push the initiative of ditching the US Dollar.

While metals such as gold, silver, and palladium have gained in price this week, the US dollar is set for a fourth-straight week of decline. Gold in particular is up 2.5%, with spot gold trading at $2,487.66 per ounce Friday morning. US Gold futures also rose 1.4% to $2,526.40. Buyers across the globe, especially overseas, appear to be following BRICS’ footsteps and investing more in Gold than the greenback.

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“Gold surged to a fresh all-time high after two weeks of extremely choppy trading as bulls finally impose their will,” Tai Wong, a New York-based independent metals trader, said. “The $2,500 hurdle is likely to fall soon though attention will shortly focus on Fed Chair Powell’s speech at Jackson Hole a week from today to provide direction for a more detailed outlook on the upcoming rate cuts.”

BRICS Continues To Drive Gold In Effort To Ditch US Dollar

Reports suggest that BRICS could back their new currency with gold and not the US dollar or other local currencies. The alliance aims to get back to the gold standard and maintain a multipolar world for all trade and transactions. The World Gold Council reported that BRICS has been the largest buyer of gold since 2022. The bloc has been accumulating tons worth of the precious metal in the reserves.

Inflation has finally begun to slow, marking a potential turning point for the US dollar. The dollar has struggled since the end of the pandemic to regain lost ground. The rise of the BRICS bloc has not done the currency any favors either. More countries are showing interest in the alliance than ever before. Indeed, more nations are expected to be invited to join at the bloc’s Fall 2024 summit. With more countries opting for Gold as a hedge against the US dollar, the BRICS de-dollarization mission may peak higher and sooner.

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In worst fears for the US dollar, there is growing speculation that the country is heading for a recession. Odds are rising for this to occur according to some experts. A recession would only weaken the US dollar more, strengthening BRICS on the flip side.