Precious metals, especially gold, are experiencing a significant rally led by the BRICS countries. The bloc aims to use gold to back its future currency as an alternative to the US dollar.
The Global Precious Metals Index MMI (Monthly Metals Index) has been steadily increasing by 8.25% each month, with April seeing an even more pronounced jump in the value of the metal.
Several factors are contributing to this “gold rush,” including inflation hedging, expectations of interest rate cuts, and geopolitical uncertainty. Interest in gold from BRICS countries, particularly Russia and China, has been driving the rally, with efforts to encourage other member countries to participate.
Recent record highs in gold prices indicate a new range, with continued formation of higher lows suggesting increased volatility in the market. Prices have breached 2020 levels on the back of this bullish momentum.
Gold’s appeal lies in its liquidity, return characteristics and resilience during major events or economic downturns, making it a compelling alternative to the US dollar – an agenda the BRICS countries are actively promoting.
The steady increase in China’s gold reserves, now in its 18th consecutive month, underscores this trend. Central banks in emerging markets are fueling demand for gold, with China leading the way and looking to inspire other BRICS countries to follow suit.
As the BRICS nations consider a shift away from the US dollar to a gold-backed alternative, the ongoing gold rush is expected to continue, signaling a major shift in global currency dynamics.
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