The World Gold Council revealed in a recent report that the BRICS countries (Brazil, Russia, India, China and South Africa) are together holding more than 20% of the world's gold reserves, Jerusalem Post reported.
The report did not specify whether this is the gold reserves of the founding BRICS countries of Brazil, Russia, India, China and South Africa alone or whether it included the reserves of the new BRICS members who joined on January 1, 2024, including Egypt, Ethiopia, Iran and the United Arab Emirates. However, this significant gold reserves highlight the economic strength and growing influence of the BRICS emerging economies.
According to the report, Russia leads in gold reserves with 2,340 tons of gold, accounting for 8.1% of global gold reserves. Russia is followed by China, which owns 2,260 tonnes of gold, contributing significantly to BRICS gold reserves. Thus, Russia and China account for 74% of the total gold reserves of BRICS countries.
Other BRICS countries also have significant reserves, with India leading with 840 tons.
Significant gold reserves of BRICS countries have some important meanings. First, in terms of economic strength, gold reserves help the group consolidate its position as a major economic actor in the international arena.
In addition, owning large gold reserves has an impact on financial stability because gold is a stable asset that helps reduce economic risks and protect against inflation.
Large gold reserves also contribute to the bloc's political influence. A BRICS currency, backed by gold, could challenge the dominance of the US dollar and change the global balance of power.
Another meaning of BRICS's significant gold reserves is to help increase investment opportunities. As demand for gold increases, due to factors such as central banks' gold trading activities and unstable economy, it brings many potential investment opportunities.
The BRICS summit in Kazan, Russia this week is expected to provide more details about the new BRICS currency and the expected launch date of the BRICS currency.
The introduction of a BRICS currency could accelerate the trend of de-dollarization, as many countries are looking to reduce their dependence on the US dollar.
The BRICS currency is also likely to have an impact on global gold prices because as demand for gold from central banks increases, investors can push the value of gold up.
As BRICS countries continue to expand their influence and explore new economic models, BRICS gold reserves, along with the emergence of a new currency, could have far-reaching impacts on the global financial system. Investors and policymakers should closely monitor these developments to assess the potential impact on the global market and economy.
