With tax season upon us, investors are paying especially close attention to their finances. Investors in precious metals have been confidently watching their holdings grow as gold continues topping new highs each week. Those who sat on the sidelines are experiencing FOMO and wondering if it’s too late to join the ride.

In this week’s The Gold Spot, Precious Metals Advisor John Karow and Scottsdale Bullion & Coin founder Eric Sepanek explain gold’s recent moves, which major economy (hint: NOT the US or Europe) is pushing gold higher, and why gold prices are expected to continue this rally.

Gold’s Rise Continues…

Gold broke through the $2,300 an ounce1 barrier for the first time on Wednesday April 3, 2024, setting yet another record. The spot price of gold closed out the trading week above $2,330 an ounce with gold futures sitting around $2,350 an ounce. With over half a dozen records broken in the past few weeks, gold is showing strength unlike anything seen in a while. 2024 gold price forecasts were already strong, but now experts are wondering if it’s time to set higher marks.

China Behind Gold Surge

American and European markets have shown signs of relative strength over the past few months, but these powerhouses aren’t responsible for gold’s tremendous rise. China has been the main driving force behind this surge. In Q1 of 2024 alone, the CCP added 22 more tonnes of gold to their rapidly expanding reserves which has topped up for 16 months in a row.

China is buying gold hand over fist.
Precious Metals Advisor John Karow

In 2023, China grew its gold buying by 30% compared to the previous year. Everything suggests this gold binge will continue in 2024 and beyond.

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BRICS Plan for a Dollar-Free Future

Although China is leading the record central bank gold buying, the rest of the BRICS nations are following the leader. The expanding consortium of burgeoning economies has accumulated more than 6,469 tonnes of gold, representing 17% of global gold holdings. That number will only grow as new countries join and current members continue the gold-buying frenzy.

This modern-day rush to gold has been spurred by a worldwide process of de-dollarization as countries seek to untether their economies from the greenback. This is happening for a variety of economic and geopolitical reasons, including:

Weaponization of the Dollar

China and Russia – two of the most powerful economies among the BRICS – have been strategically moving away from USD to circumnavigate sanctions placed by the West. By backing their currencies with gold instead of the dollar, these rival countries can successfully free themselves of US economic pressure.

US National Debt

The staggering $34 trillion debt bubble has shaken the foundations of trust countries had in the stability and security of the dollar. The reckless spending policies of our financial elites have done nothing to assuage the fears of investors which the US relies upon to service its astounding debt. The US economy is a sinking ship, and no country wants to be stuck on board.

Reserve Currency Status

Another motivation behind the shift to gold is the opportunity to directly rival the dollar. A gold-backed BRICS currency is already in the works with member nations seeking a trading alternative to USD. This move could serve as the proverbial straw that breaks the back of the dollar’s decades-long reign as the world reserve currency.

Sunset of USD Dominance?

The US dollar has been the premier currency since the fall of the British Pound in the wake of consecutive world wars. For the first couple of decades, the greenback was propped up by physical gold. In 1971, the Nixon Shock abruptly ended the remaining remnants of the gold standard and was replaced by the Petrodollar. A combination of waning US-Saudi relations, growing Petroyuan acceptance, and increasing renewable energy focus has weakened this final support of USD, leaving it vulnerable to a potential replacement.

This is the precise weakness China has been seeking to replace the dominance of the US dollar with the Yuan. The BRICS nations and their gold-linked currency are a means to an end for the CCP. The US might still boast the world’s largest gold reserves, but that title is quickly being assumed by the BRICS nations as US gold buying has remained stagnant for years.

[The BRICS] are protecting themselves, and [the US] just keeps doing the same thing over and over. We’re going to pay the price.
Precious Metals Advisor John Karow

To learn more about how the US dollar achieved (and might lose) its leading role on the world stage, claim a FREE copy of our comprehensive Petrodollar Report.

Don’t Wait to Buy Gold, Buy Gold and Wait

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Investors shouldn’t be deterred by gold’s record-setting rise. The yellow metal’s confidence is justified given the modern-day gold rush led by central banks. This demand is reinforced by the US dollar’s waning dominance, the rise of geopolitical conflicts, and widespread economic uncertainty. Instead of waiting to buy gold, investors are better off buying now and waiting for prices to inevitably rise.


Question or Comments?

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