Key Islamic Nations Ditching The Dollar
After the Islamic Summit concluded in Malaysia last week, Iran, Malaysia, Turkey and Qatar announced they are exploring trading in gold. This comes in the wake of hefty sanctions by the U.S. on Iran. Fearing future penalties, the Malaysian PM said,
I have suggested that we re-visit the idea of trading using the gold dinar and barter trade among us. We are seriously looking into this and we hope that we will be able to find a mechanism to put it into effect.
The dollar has been world’s reserve currency since 1944 but the number of countries ditching dollar is on the rise.
Gold, on the other hand, has been the de facto reserve currency for thousands of years. Its demand will only go up if the trend of ditching the dollar continues.
Hoarding Is On The Rise
Russia is leading the trend in gold hoarding. Russian mining operations have gone up a gear this year. They mined 185 tons of gold from January to July in 2019. Compared to 2018, this is an increase of roughly 18%. Consequently, Russia’s total gold reserve is up to $548 billion.
Quite clearly, Russia seems to be moving away from the U.S. dollar, but it is not alone. Everyone from the super-rich to the central banks seems to be on a gold buying and hoarding spree.
Considering all the technical and fundamental reasons, gold price looks set to skyrocket in the years to come.
This article was edited by Sam Bourgi.
Last modified: December 25, 2019 2:45 AM UTC
Ayush Singh@TraderBased
Ayush is a financial blogger and a swing trader. He has roughly four years of experience covering the U.S. stock market and has consistently featured on Tip Ranks' list of top performing bloggers. He is based out of Indore, India and is also managing the portfolios of several local retail clients. You can follow him on Twitter @TraderBased or email him on [email protected]
