Same result, different approach

Most central banks in industrialized countries have a gold reserve that is part of the total foreign exchange reserve. The reason for this is that gold has a historical role in the monetary system.

Earlier this month, The Jerusalem Post reported that the BRICS unit will be quote "40% backed by gold and 60% backed by reserves in member currencies" unquote. The BRICS unit is essentially an attempt to link oil to gold instead of the US dollar. The creation of the BRICS unit may be a way to try to circumvent possible future sanctions and to reduce the influence of the US dollar.

It will be interesting to see how the West will let this play out. Will they continue to allow BRICS to use gold as net settlement asset which will bid up the gold or will they implement USD sanctions against BRICS to make them stop using gold which will also bid up the gold. Either way, the result is the same in the short term.

AI generated image with Grok