BRICS member China is stockpiling gold adding the precious metal to its reserves throughout late 2022 and 2023. China is accumulating gold for 14 consecutive months making it the largest buyer of the precious metal last year. The latest data shows that BRICS member China purchased 9 tonnes of gold (290,000 ozs) to its reserves in December 2023 alone. The cost to stockpile the 9 tonnes of gold to its reserves stood at $532 million last month. In total, China has added 225 tonnes of gold to its reserves in 2023 alone.
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Not just China, the overall BRICS countries have been on a gold accumulating spree since 2022. BRICS countries Russia, India, and South Africa have been steadily buying the precious metal for the last 14 months. In fact, the largest buyer of gold in 2023 was the BRICS alliance, reported the World Gold Council. Read here to know how much gold the Central Banks have accumulated in a year.
The New BRICS Currency To Be Backed By Gold?
The reason for the BRICS countries’ accumulating tonnes of the precious metal in 14 months remains to be a mystery. While some speculate that the upcoming BRICS currency could be backed by the yellow metal, others claim it could be a routine investment to diversify their reserves. The real reason for the gold purchases from BRICS countries remains to be unknown.
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If BRICS backs their new currency with gold, it could provide the alliance strength to sustain in the global markets. Gold is traditionally a safe asset and BRICS can receive support during the launch of their soon-to-be-released currency.
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However, gold can provide support only at the beginning, but could fail to make the currency sustainable in the long term. The prices of gold are subjected to market risks, as a strong US dollar could send the price of the precious metal down.
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