BRICS: While waiting for the common currency, the alliance challenges the dollar with gold

BRICS have announced their plan to launch their own currency to break free from the dependency on the dollar. While this project comes to fruition, the alliance is shunning the dollar through various strategies. One of the latest strategies is the massive use of gold by the BRICS as a means to support their local currencies.

Gold is at the Heart of BRICS Monetary Strategy

Since last year, BRICS have been continuously expanding their reach and influence. The alliance plans to broaden its membership in 2024. But it is moving forward with ambitious and bold initiatives.

To recall, BRICS have announced the development of a new currency to lessen international trade’s dependency on the American dollar. A prospect that is expected to represent a significant geopolitical change.

It turns out that gold, a commodity highly valued by BRICS, is the central element meant to carry this initiative forward. Recently the price of the precious metal reached a record level of 2,340 dollars, an increase of about 1.24% over the last 24 hours.

The surge in demand for gold underscores its central role as a battleground between the traditional dominance of the American dollar and the rising power of the BRICS. Russia and China are leading this dynamic.

The Role of Russia and China in this Dynamic

It must be said that Russia’s recent actions in Ukraine have prompted it to look for alternative financial mechanisms. As a result, Russia and the BRICS are increasingly turning to gold to support their currencies.

Meanwhile, more and more countries, including the United States, are reconsidering gold as a global reserve. This comes as the dollar is gradually declining. A dynamic that enhances the status of gold, paving the way for a prolonged standoff between the BRICS and the dollar.

In addition, Russia’s intention to establish a gold-based system encourages other countries, especially in Africa, to reevaluate their dependence on the dollar. Countries like Zimbabwe are closely observing the BRICS’ dedollarization efforts and are consequently exploring the potential of gold-backed currencies.

This occurs in a context where African nations aspire to match the economic growth seen in Western and Northern regions. They thus consider a gold-backed currency as a crucial step towards achieving this goal. In any case, as BRICS gain ground by encouraging other nations to follow their lead, the transformation of the international monetary system accelerates.