The BRICS economic alliance has been actively boosting its gold reserves as part of its ongoing strategy, with China leading a 17-month streak of acquisitions of the precious metal. This collective effort is expected to boost the value of gold, especially in light of the latest price peak reached last month, which hit a record high of $2,431.
The BRICS emphasis on diversification away from the US dollar is a significant factor in this trend. Significant Chinese demand for gold in particular has played a crucial role in rising prices. Ross Norman, CEO of Metalsdaily.com, emphasized China’s key role, describing the flow of gold into the country as having gone from solid to torrential.
China’s never-ending series of purchases has not only increased global demand for gold, but has also contributed to the decrease in available gold reserves, further increasing its value. Analysts, including those at Morgan, predict that this trend will drive the price of gold to exceed $2,500 by 2024, marking a significant shift in the perception of the value of gold and in countries’ strategies for buying and diversifying it.
This shift reflects practices not seen since the pre-Bretton Woods era and highlights the changing dynamics of geopolitical and economic considerations related to gold.
For the African continent and African countries in particular, this increase in the value of gold and the emphasis on holding it as a strategic reserve could have significant implications. As global demand and prices for gold increase, resource-rich African countries could benefit economically from valorising their gold.
