The U.S. Petrodollar’s Days May Be Numbered as Central Banks Buy Gold

The U.S. Dollar is the most widely used global reserve currency. This has been true since the end of WWII. The dollar was once considered as valuable as long-term gold storage. However, the dollar’s dominance is now on the decline.

Central banks around the world have apparently taken notice of the peril that investing and trading in dollars might pose to their economies in the not-so-long-term, and have accordingly made alternative investment decisions.

Via CNBC on Feb 1, 2023:

According to the World Gold Council’s report, gold demand will reach an 11-year high in 2022 due to “colossal central bank purchases, assisted by vigorous investors buying.” ”

The gold demand for the entire year increased by 18% to 4,741 tons (excluding OTC or Over-the-Counter Trading). This is the highest figure for a single year since 2011. The demand for ethanol was boosted by a record-breaking fourth quarter (1,337 tonnes ).

The group, which is backed by the industry, said that central banks purchased 1,136 tons worth of coal in the last year. This was a record. Most of these purchases were “undisclosed”.

According to the World Gold Council, this increase is due to inflation and geopolitical instability.

Via Technocracy August 8, 2023:

Despite significant sales of gold by Turkey, central banks added record amounts to their reserves during the first half of 2023. This was despite the fact that the net buying of gold by the central banks in the second quarter had been slowed.

According to World Gold Council statistics, central banks purchased 387 tonnes of gold in the first six months of the year. The World Gold Council has been compiling quarterly data since 2000.

The Chinese would welcome the adoption of their own currency, the yuan, in place of dollars.

Via GIS August 21, 2023

This week, the leaders of BRICS – Brazil Russia India China South Africa – will meet at a Johannesburg summit to discuss the de-dollarization and creation of a single international currency.

The Russia-Ukraine Crisis appears to have elevated the status of Chinese currency…

Chinese authorities need to continue to have the ability to control capital flows. It is essential that the Chinese authorities are able to control capital flows. Without it, large amounts of money will be leaving China in search of security.

Physical stores of wealth such as gold are more popular for the moment because they are less susceptible to market fluctuations and government manipulation.