According to Kitco, gold prices reversed to increase when receiving information that Russia proposed BRICS member countries to create their own precious metals exchange.
The news comes after a statement adopted by BRICS leaders on Wednesday, backing increased precious metals trade between members based on common quality standards.
The Russian Ministry of Finance made the official announcement on Thursday. According to Russia's Oreanda news agency, the ministry said in a statement: "The creation of a metal trading mechanism within the BRICS countries will lead to the formation of fair and equal competition based on exchange principles."
“The mechanism will include the creation of metal price indicators, standards for the production and trading of bullion, recognition of market participants, clearing and auditing within the BRICS countries. The participating countries will have a reliable method for stable exchange transactions,” Russian Finance Minister Anton Siluanov said.
The Russian Ministry of Finance added that it expects the BRICS precious metals exchange “to become the main regulator of precious metals prices.”
Andy Schectman, chairman and owner of Miles Franklin Precious Metals, told Kitco News in a recent interview that this week's BRICS summit could accelerate a global financial reset, which could cause gold prices to re-evaluate.
BRICS members, along with other central banks around the world, have been accumulating gold at near-record levels for years, the expert said. Central banks around the world have also been repatriating gold to store within their borders.
Gold prices rebounded after a sharp sell-off on Wednesday as the market ignored U.S. manufacturing and services data, said Neils Christensen, an analyst at Kitco News. S&P Global said its purchasing managers index showed continued contraction in the manufacturing sector, while the services sector continued to grow.
The services PMI rose slightly to 55.3 from 55.2 reported in September, preliminary data released Thursday showed. The reading was slightly better than expected, with economists' consensus forecasting a reading of 55.0. Activity in the services sector rose to a two-month high in October, the report said.
Meanwhile, the manufacturing sector continued to struggle as the PMI edged up slightly from 47.3 to 47.8. Notably, economists had forecast around 47.5.
“The US flash PMI survey in October signalled a further solid increase in business activity to mark a strong start to the fourth quarter of 2024. However, growth was driven by the services sector, as manufacturing output fell for the third consecutive month,” the report said.
Gold markets rebounded from Wednesday’s lows but did not react much to the latest economic data. December gold futures last traded at $2,745.90 an ounce, up 0.62% on the day.
Safe-haven demand and a bullish chart are keeping a solid floor for the gold market, said Kitco senior analyst Jim Wyckoff. Geopolitical tensions in the Middle East and the upcoming U.S. presidential election are also supporting gold prices, he said.
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