Gold a reason for the price strength
Gold strength is difficult to explain without considering this following scenario!
New this year was ......sanctions, removal from the SWIFT system, which happened to Russia, forex reserves frozen, or being limited in their use. Has created a new factor in the price of gold. Because this happen......
World Central banks began during the second half of last year, to buy a total of nearly 400 tons of gold in the third quarter of 2022, Central banks purchased 673 tons of gold in the first three quarters of the year. China began selling dollars to buy gold and move away from the dollar. China alone bought 30 tons in December, 32 tons in November and now control 2,010 tons of gold. Why is this occurring?
While there are limitations to gold's usefulness compared to, U.S. Treasuries, its unique appeal is found in its unquestioned value, and the ability to store bars in national vaults, safe from foreign seizure. Central banks worried about the potential for the dollar find gold appealing. Russia and China are working to remove their reliance on the dollars, US treasury bills and selecting gold as the method to trade with each other. The trade turnover between the two countries broke a record and reached around $200 billion by the end of 2022. Saudi Arabia stating it is open to discussing trade in currencies other than the U.S. dollar. Recently, Saudi Arabia has been working to increase cooperation with China. It's part of the strategy. China is creating a currency that's outside of the SWIFT system to stop overreaching from U.S. government agencies. That is significant because China is the biggest buyer of oil. Iran and Russia are reportedly working together to create a new stablecoin backed by gold.
Part of the continuing pressure to reintroduce gold as a trading or backing mechanism is related to the BRICS trading bloc. Unlike the G-7 or G-20 group of nations which is an exclusive club, the leaders of the BRICS have made overtures to any nations interested in joining. Not surprisingly, some of those nations warming up to BRICS have been previously sanctioned by Western nations. Overtures by BRICS nations have included an opportunity for full membership, regardless of the amount of dollar-based debt a nation may owe. In other words, they can become trading partners in the new gold and regional currency-based network of BRICS, without regard to debt or sanctioning status in the Western-based financial system.
While this outcome might sound out of this world, it is not that far-fetched given some of the geopolitical and macroeconomic surprises that occurred this year.
Gold is a decentralized asset. No one person is controlling it. No one government or person is controlling the price. By those reasons alone gold is perfect for many countries, and if trend grows the price of gold will be controlled by a new factor.
This is not a recommendation to buy or sell but to emphasis the changing landscape of this commodity.
I appreciate your time and welcome your feedback
New this year was ......sanctions, removal from the SWIFT system, which happened to Russia, forex reserves frozen, or being limited in their use. Has created a new factor in the price of gold. Because this happen......
World Central banks began during the second half of last year, to buy a total of nearly 400 tons of gold in the third quarter of 2022, Central banks purchased 673 tons of gold in the first three quarters of the year. China began selling dollars to buy gold and move away from the dollar. China alone bought 30 tons in December, 32 tons in November and now control 2,010 tons of gold. Why is this occurring?
While there are limitations to gold's usefulness compared to, U.S. Treasuries, its unique appeal is found in its unquestioned value, and the ability to store bars in national vaults, safe from foreign seizure. Central banks worried about the potential for the dollar find gold appealing. Russia and China are working to remove their reliance on the dollars, US treasury bills and selecting gold as the method to trade with each other. The trade turnover between the two countries broke a record and reached around $200 billion by the end of 2022. Saudi Arabia stating it is open to discussing trade in currencies other than the U.S. dollar. Recently, Saudi Arabia has been working to increase cooperation with China. It's part of the strategy. China is creating a currency that's outside of the SWIFT system to stop overreaching from U.S. government agencies. That is significant because China is the biggest buyer of oil. Iran and Russia are reportedly working together to create a new stablecoin backed by gold.
Part of the continuing pressure to reintroduce gold as a trading or backing mechanism is related to the BRICS trading bloc. Unlike the G-7 or G-20 group of nations which is an exclusive club, the leaders of the BRICS have made overtures to any nations interested in joining. Not surprisingly, some of those nations warming up to BRICS have been previously sanctioned by Western nations. Overtures by BRICS nations have included an opportunity for full membership, regardless of the amount of dollar-based debt a nation may owe. In other words, they can become trading partners in the new gold and regional currency-based network of BRICS, without regard to debt or sanctioning status in the Western-based financial system.
While this outcome might sound out of this world, it is not that far-fetched given some of the geopolitical and macroeconomic surprises that occurred this year.
Gold is a decentralized asset. No one person is controlling it. No one government or person is controlling the price. By those reasons alone gold is perfect for many countries, and if trend grows the price of gold will be controlled by a new factor.
This is not a recommendation to buy or sell but to emphasis the changing landscape of this commodity.
I appreciate your time and welcome your feedback
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