An interesting article on * March 1, 2024 ... no doubt we'll all draw our own conclusions.
Gold Digger: Hello yellow BRICS road… 25 more countries reportedly keen to join gold-loving alliance.
As another golden weekend approaches (checks weather app… hmm, overcast in Sydney, beaut in Perth on Sunday) the precious yellow one has hit a one-month high, currently $2,050 in star spangled dollars, $3,153 in the dinky-di variety. The US dollar dipping overnight has something to do with that. So does the latest US inflation data, which has settled in about as soft as an American truck driver’s belly at an all-you-can-eat cheeseburger buffet.Number crunching from the folks at the US Bureau of Economic Analysis studying the Core Personal Consumption Expenditure Price Index – the PCE – confirmed disinflationary action. This consequently saw a drop in US Treasury bond yields as well, amid the idea that rate cuts could arrive sooner than expected.Annual figures came in as widely expected, reportedly – with inflation decreasing from December’s 2.9% to 2.8% YoY in January. Headline inflation meanwhile dipped sharply from 2.6% to 2.4% YoY in January, lining up with expectations.Overall upshot – this latest data has given gold a boost. BRICS narrative growsMeanwhile, another narrative shaping up for the precious metal is the BRICS alliance – the intergovernmental organisation that originally comprised Brazil, Russia, India, China and South Africa and has grown to include Egypt, Ethiopia, Iran, the United Arab Emirates and (possibly) Saudi Arabia, which a month ago was reportedly still considering its invitation.The alliance has strong ties to gold. A BRICS currency is being floated as an idea at present, raised and pushed at last year’s BRICS summit in South Africa, with the strong possibility that the precious metal could form the backed basis for its international exchange.And, according to the Russian News Agency South Africa’s ambassador to Russia, Mzuvukile Geoff Maqetuka, has reportedly said 25 countries are on the waitlist to join BRICS.If that’s true, then that’s another 25 countries presumably looking to buy/stockpile more gold, if they aren’t already.According to data from the World Gold Council released in January, BRICS nations were the biggest buyers of gold in 2023, with China, Russia and India in particular stockpiling the gleaming metal like Smaug from The Hobbit.China alone added 225 tonnes of gold to its reserves in 2023.The WGC also recently noted that central bank global reserves have risen by more than 1,000 tonnes in both 2022 and 2023, with China leading the way. And last week, too, big Aussie bank ANZ’s commodity strategists said:“EM [emerging market] central banks could purchase over 600 tonnes of gold annually until 2030, to take its share in their foreign reserves to 10%. China will likely occupy the lion’s share in global official gold demand.” As for the 25 countries supposedly frothing to join BRICS and disrupt the geopolitcal landscape, the US economy and its dominant world reserve currency, the South African envoy to Russia reportedly said: “In Kazan (at the BRICS summit in Russia slated for later this year), it goes without saying there will be new members… There were all in all close to about 25 all in all who indicated that they are ready to join BRICS.”And which countries is he talking about? Well he didn’t go into all 25 but reportedly said:“Countries like Algeria, countries like Belarus, Pakistan, and a host of others.”According to the Financial Times, current BRICS nations have indeed received formal expressions of interest from Argentina, Indonesia, Saudi Arabia and 20 other countries to become the group’s first members since South Africa joined in 2010.China’s president Xi Jinping last year urged leaders of the emerging-markets bloc meeting at the BRICS summit in Johannesburg to speed up the pace of BRICS expansion.Per the FT:Xi’s call for faster expansion of the Brics group comes as Beijing seeks to forge the bloc into a bigger rival to the G7. “We should let more countries join the Brics family and pool wisdom to make global governance more fair and reasonable,” he told the Brics summit.
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