Russia has proposed that BRICS member countries create their own precious metals exchange in a move that could upend long-standing international pricing mechanisms for gold, silver, platinum and other precious metals, Kitco News reported.
The news comes shortly after a statement adopted by leaders of the BRICS countries on October 23 supporting increased precious metal trade among members based on common product quality standards.
On October 24, the Russian Ministry of Finance made an official announcement. "The establishment of a metal trading mechanism among the BRICS countries will help form fair and equal competition based on exchange principles," the Russian Oreanda news agency quoted the announcement of the Russian Ministry of Finance.
Russian Finance Minister Anton Siluanov said that the mechanism will include the creation of gold price indicators, standards for the production and trading of gold bullion, recognition of market participants, clearing and auditing within the BRICS countries.
The Ministry of Finance added that it expects the BRICS precious metals exchange “to become the key regulator of precious metals prices”.
BRICS currency backed by gold
Andy Schectman, President and Owner of Miles Franklin Precious Metals, told Kitco News in a recent interview that the BRICS summit could accelerate a global financial reset that could see gold revalued at as high as $150,000 an ounce.
The BRICS currency will be pegged 40% to the value of gold and 60% to a basket of BRICS national currencies, according to a report. It is designed as an “apolitical currency,” addressing countries’ concerns about the potential weaponization of the US dollar.
Schectman calls it an acceleration of the movement to de-dollarize and move toward a new system that could actually be backed by gold.
BRICS members, along with other central banks around the world, have been accumulating gold at near-record levels for years. In addition, central banks around the world have also been repatriating gold to store within their borders.
Schectman outlines four scenarios for how a potential global financial reset could play out, and one scenario involves a re-valuation of the price of gold.
"Assume the US gold reserves exceed 8,000 tonnes, which has not been audited for a long time, simply by revaluing gold at a balance sheet level with liabilities that is now higher than our current asset level."
“In this case, it’s a different game,” Schectman said. “You’re pricing gold at $150,000 an ounce. It sounds crazy, but your balance sheet is now completely clean.”
“Gold will reach a price that no one thought was possible, it will be anchored to a new system and never go down,” Schectman said.
