The Economist: rising gold prices underpinned a falling dollar

Since the end of 2023, gold prices have increased by about 30%, with an ounce (28.35 grams) rising to $2,750. The Economist magazine writes that the main factor in this phenomenon is the purchase of gold metal by the central banks of the world.

Thus, the share of gold assets in the central banks of the world rose from 6% in 2008 to 11%. This is primarily due to the decline in confidence in the dollar after the United States decided to freeze Russian gold and foreign exchange assets. Thus, the American currency lost its “safe haven” status and gold purchases intensified, leading to an increase in price.

The amount of frozen assets of the Russian Federation is about $280 billion. Also, the West has largely disconnected Russia from the SWIFT interbank payment system.

At the same time, Moscow has become one of the world leaders for buying gold. The Visual Capitalist resource noted that this is being done in the face of strengthening Western sanctions and growing geopolitical tensions.

The previous day, The Economist noted that the BRICS countries are creating a platform for international payments BRICS bridge. Experts believe that this medium will be able to replace the dollar in payments over time, as transactions will include a lack of control from any center. It will be impossible to disconnect individual participants from the system.