China and Russia lead the “global gold rush” in 2024

In the first nine months of 2023, central banks around the world have intensified their interest in acquiring reserves of this coveted metal, with China and Russia leading the bullish trend. According to the World Gold Council, purchases of gold by central banks reached 800 tonnes net, an increase of 14% compared to the same period last year.

For 2024, projections indicate that central banks’ gold rush will persist for at least the first half of this year, according to data from Schiffgold.

This phenomenon is explained by two main factors. First, de-dollarization is expected to accelerate in 2024, with powers like China and Russia strategically moving away from the hegemony of the dollar. In Russia, the actions of the Biden administration to isolate Moscow with sanctions, stemming from the conflict in Ukraine, further push Russia’s disinvestment in the US dollar. It is therefore logical that Russia’s gold reserves will continue to grow in 2024.

Second, the Fed’s proclamation of a victory against inflation could further fuel interest in buying gold. The possibility that the Fed will be forced to cut interest rates in 2024, according to Schiffgold, leads central banks to seek easier protection against monetary policies.

In short, lower rates in 2024 reinforce the prospect of rising inflation, leading to a depreciation of the dollar and higher prices for gold and other commodities. Central banks, anticipating downward pressures on the dollar, are gearing up to strengthen their gold reserves, even as the Fed proclaims victory in the battle against inflation.

The question remains: A dollar crisis or a sovereign debt collapse? Central banks are not willing to wait to find out.

Finally, the year 2024 presents more uncertainty, with ongoing conflicts between the powers of the United States and presidential elections that amplify global political instability. Candidates like RFK Jr. and Vivek Ramaswamy advocate anti-system messages about central bank control, adding an element of intrigue to this complex picture.

K. Tovar

Source: Bancaynegocios

(Reference image source: Unsplash+)

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