BRICS Nations Spark Gold Frenzy, Fueling Speculation of Currency Backing
China, one of the BRICS nations, is actively accumulating gold reserves. In April, China increased its gold holding by 8.09 tons, as per data from the State Administration of Foreign Exchange. Brazil, Russia, India, South Africa, and other BRICS nations also acquire gold through their respective Central Banks.
Reports are suggesting that the upcoming BRICS currency may be backed by gold, leading to the increased purchase of the precious metal by the bloc. China, in particular, has been the frontrunner in accumulating substantial amounts of gold during Q1 and Q2 of 2023.
As of now, China has amassed a total of 2,076 tons of gold within a year, with an additional increase of 120 tons up until March. In April, the reserves grew by an additional 8.09 tons, solidifying the BRICS bloc as the leading buyer of gold.
Conversely, China’s foreign reserve currency holdings rose to $3.2048 trillion in April, marking an increase of $20.9 billion from March. This rise in foreign exchange is a result of global macroeconomic factors causing the depreciation of the U.S. dollar.
READ MORE: Top Bitcoin Whales Accumulate as Crypto Market Faces Legal Woes
Furthermore, China’s economic rebound adds further pressure to the U.S. dollar, and the introduction of a new BRICS currency could potentially worsen the prospects of the USD.
The acquisition of gold by the BRICS bloc serves the purpose of backing their forthcoming currency and reducing dependence on the U.S. dollar.
Frank Holmes, the CEO of U.S. Global Investors, expressed concern over the gold-buying trend among BRICS nations, as it indicates a potential shift towards a multipolar world. He emphasized the emergence of a U.S.-centric world on one side and a China-centric world on the other.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
