BRICS founder China is currently driving up the price of Gold by swooping in to buy more supply of the precious metal. As the US dollar plummets, alternatives are growing more important within the global reserve. Thus, gold has experienced significant price growth recently, rising to record highs of 2,342.43. According to economists, the People’s Bank of China is leading the way, actively investing in the asset.
How China Is Driving Up Global Gold Prices
Gold’s value is in its liquidity, return characteristics, and resilience amid any significant events or economic downturn. Thus, it serves as a great alternative to the US dollar, something that China is exposing. The BRICS alliance is actively working on de-dollarization: ditching the US Dollar as the biggest global reserve currency. Fortunately, the bloc is garnering plenty of support on this mission, not just from other countries, but economic circumstances.
The US Dollar has slowly fallen out of the strongest currencies in the world. This is in part due to its fight against inflation and plenty of interest rate hikes in 2023. Those hikes have since slowed, but the damage was significant, much to the delight of BRICS and China surely.
Also Read: BRICS: Chinese Yuan Officially Overtakes US Dollar
Gold has been on a bull run for the past two months. With this bullish rise, China is increasing its investment in the precious metal. The People’s Bank of China increased its gold reserves for the 16th straight month in February, according to available data for that month published by the World Gold Council. Central banks in newly emerging markets are driving demand for Gold, and China hopes to be the dominant hand in Gold trade moving forward.
Furthermore, the under-development BRICS currency is rumored to be backed by gold. Thus, China and the rest of the bloc are swooping in on the metal’s surge in hopes that the asset has more room to grow.