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Central Banks Added 77 tons of Gold in September

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Many of the BRICS countries continue to improve their balance sheets, while switching trade agreements away from the dollar in favor of local currency transactions between nations.

In September 2023, more than 77 tons of gold was bought by various country’s central banks.

With September’s purchases, central banks added a net 337 tons of gold in Q3. It was the second-highest third-quarter total on record behind 2022.

China continued to be the biggest gold purchaser, adding another 26 tons of gold to its hoard in September. It was the 11th straight month of increasing Chinese gold reserves.

Since the beginning of the year, the People’s Bank of China has increased its reserves by at least 181 tons, and it has added 232 tons since it resumed official purchases in November 2022. As of the end of September, China officially held 2,192 tons of gold, making up 4% of its total reserves.

Poland was another big gold buyer in September, adding 19 tons to its reserves. The National Bank of Poland has bought 105 tons of gold this year, following a plan announced in 2021 to add 100 tons to its reserves.

Turkey added 8 tons of gold to its holdings in September and appears to be back on the path toward expanding its reserves.

Central banks, institutional investors, and individual investors all include gold in their holdings for several reasons, many of which are related to gold’s historical and intrinsic qualities as a store of value.

For Central Banks, gold is considered a counterbalance for the paper assets they hold, such as currency reserves and government bonds. It has a history of maintaining its value over the long term, unlike fiat currencies which are subject to inflation.

Gold is a widely accepted asset and can be sold in markets around the world, ensuring that investors can liquidate their holdings if needed.

Similar to central banks, individual investors can use gold to protect against the erosion of purchasing power that comes with inflation.

Gold bars are accessible to a wide range of investors, with various sizes available, from small gram sized bars to larger 1 oz gold bars.

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Central Banks Continue Buying Gold

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China has continued its pursuit of gold buying strategy throughout the year. As more agreements enter into local currency trading, other central banks are adding Yuen to their holdings in exchange for gold, helping the Chinese Central Bank add to their vaults.

Central banks buy and hold gold for several reasons, which continue to evolve between BRICS countries. In general, Central banks hold gold to preserve the value of their fiat currency reserves, which historically loses value due to inflation and other government policies.

China extended its streak of expanding gold reserves to a 10th consecutive month in August while the country’s total foreign exchange reserves declined amid falling prices of global financial assets.

The central bank added about 930,000 troy ounces of gold into its reserves last month, increasing its holdings to 69.62 million ounces (2,165 tons), according to data from the State Administration of Foreign Exchange (SAFE). Since November, China has added a total of 5.95 million ounces of the precious metal to its hoard.

Gold is often seen as a safe-haven asset during times of economic or financial crisis. Central banks may buy gold to add to their holdings during such periods to provide stability to their financial systems and fiat currencies.

Gold is a universally recognized and accepted form of payment.

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UBS Issues Report on Central Bank Gold Buying

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Banking giant UBS says demand for gold from central banks around the world is likely to surge this year as countries continue to back away from the US dollar in favor of local currency and alternative currencies that are not subject to foreign government sanctions and the weaponization.

In a new report titled Three Reasons to Buy Gold Now, UBS says that it expects central banks demand to drive additional price growth this year.

Based on Q12023 data, the report estimates that central banks will accumulate 700 metric tons of gold worth $48.74 billion this year.

Many central banks have been adding to their precious metals holdings since 2008 and continue to do so at rates not seen since the 1970s.

President Nixon dropped the association of the dollar to the gold standard in 1971, referred to by historians as The Nixon Shock. This set the stage for replacing the gold standard with a petro-dollar standard, forcing central banks to divest their gold holdings and invest heavily in dollars for the import of oil and other commodities and abolishing the Bretton Woods agreement.

The 2008 financial crisis led to many foreign leaders, led by BRICS leaders, to reconsider the long term implications of the dollar based financial system. Over the last 15 years, various countries have been developing alternative systems that would allow them to buy pass G7 imposed sanctions.

The financial crisis was also the catalyst for the creation of Bitcoin. When Nakamoto generated the genesis block on January 3, 2009 the text included in the block included a headline from the The Times that read:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

The Times

While the data being released by the government shows that economic conditions are stable, everyday Americans are already starting to feel the impact of a long recession. Inflation continues to eat away at take home pay and spending, with many major retailers continuing to close locations and reduce hiring.

The continued weakening of the US dollar is a huge risk for foreign investors and central banks represent the largest group of investors.

With the risk of a full recession hitting the US economy are very high, central banks are wise to continue to move away from dollars and into a safe haven asset.

The core of the BRICS basket currency is expected to be based around gold, silver and other commodities.

UBS is predicting gold prices will continue to climb this year and in to next as the fiat currency wars begin to heat up.

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Florida and Indiana Ban Use of CBDC

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Both Florida and Indiana have recently passed laws banning the use of a central bank digital currency (CBDC) as money in those states.

These laws explicitly exclude a CBDC from the definition of money in Florida and Indiana, effectively banning its use as such in these states.

The Florida law defines central bank digital currency as a “digital medium of exchange, or digital monetary unit of account issued by the United States Federal Reserve System, a federal agency, a foreign government, a foreign central bank, or a foreign reserve system that is made directly available to a consumer by such entities” and that is “processed or validated directly by such entities.”

In the law, central bank digital currency is specifically excluded from the definition of money under the Florida Uniform Commercial Code (UCC) which regulates commerce in the state.

The provisions in the new Indiana law are similar, but the bill took a very different path to enactment.

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Zimbabwe Sells $14 Million in Gold-Backed Digital Tokens

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Zimbabwe 1 oz gold coin

The Zimbabwean economy is no stranger to hyper-inflation. In 2009, the country adopted the USD as an official alternative to their local currency which helped to stabilize prices for a while.

The economy in the landlocked nation in the southern zone of Africa is based on natural resources and the country’s largest export is gold. In a sense, the economy of Zimbabwe is like a canary in a coal mine and can give investors of a sense of the direction things are heading at home.

Inflation set in again in recent years and the country’s leaders are looking to step away from the USD in favor of gold. The initial launch of the country’s gold-backed digital currency The token’s initial offering is backed by 140 kilogram gold bars that have been allocated from central bank reserves.

The offering Zimbabwe caused a ruckus with some international lenders, with the IMF issuing a statement reminiscent of the outrage posited against El Salvador when it established bitcoin as a legal currency began issuing bitcoin bonds.

A major announcement about a gold-backed basket currency is expected from the BRICS conference in South Africa in August. The BRICS gold-backed currency will offer emerging nations greater opportunities to flourish without being dependent on the dollar currency for settling cross-border transactions.

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Preparing for the Next Dollar Crisis

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The American dollar system is broken. All of the major swings in the economy over the last few years that have been driven by political and policy-based initiatives have led to a decline in global trust of the American dollar. The ongoing banking crisis makes it more evident.

The breakneck pace at which the global banking system is becoming multipolar is supported by central banks continuing their gold stacking efforts into first quarter.

JP Morgan Chase is among the largest banks in the world. CEO Jamie Dimon made headlines last year with dire warnings about the economy.

In March of this year, JP Morgan Lead Strategist Marko Kolanovic suggested that as investors lose confidence the possibility of a Minsky moment in the markets could lead to a sudden crash in across some sectors.

Reports from the IMF and World Gold Council show the largest purchases in the first two months were Singapore (51.4 tonnes), Turkey (45.5 tonnes), China (39.8 tonnes), Russia (31.1 tonnes) and India (2.8 tonnes). 

Very few countries have reported a reduction in their central bank gold holdings. However, many reports show various countries have increased their yuan currency holdings.

Some current trends suggest the Chinese yuan is gaining a foothold because of some recent lucrative trade deals, such as those with Saudi Arabia and Brazil.

Reports from the Russian government have made the allusion that the basket currency will provide support for countries that may be rich in natural resources and could include fertile soil, rare earth elements, and of course, precious metals including gold, silver and platinum.

Countries from across the southern hemisphere are expressing interest in joining the trade agreements outside of the dollar currency. The BRICS treaty countries are purportedly preparing for the announcement of a commodity based basket currency in South Africa at their next conference in August.

The G7 was long considered the global financial powerhouse of countries that set many of our current standards since 1975. Data reported in March shows that the BRICS nations combined have overtaken the G7 in GDP, with trend lines suggesting that separation could continue through 2030.

Various reports in recent weeks have suggested that the upcoming FedNow service expected to launch this summer is the first step in a Fed role of out a nationwide CDBC. Of course, the Fed has responded to the rumors with an announcement that the payment system is not a digital currency.

The IMF, a cartel controlled by member banks, has announced that they’ve received unprecedented interest from their member central banks with more than 30 countries asking for help fast-tracking CBDC implementations.

A private organization that advocates on behalf of the IMF called the DMCA recently announced their own CBDC, seemingly backed by the banking cartel.

The Universal Monetary Unit (UMU), or Unicoin that is represented with the ANSI Character, Ü. The IMF says that it can be used to transact in any legal tender settlement currency. It is also fully programmable and can be used to enforce regulations dealing with the international banking system.

The press release claims that it is legally a money commodity but does not specify where it is legal.

The DMCA hopes that central banks will adopt its Unicoin standard when implementing their own national digital currency initiatives.

More investors are beginning to view investing in precious metals as a way to preserve their money for the coming financial hurricane.

Wage growth has tumbled, thousands have been laid off, unemployment levels have started to rise and we are seeing more signs that we are headed for a major recession.

Gold prices continue chasing towards record highs with spot price closing the week at $2,005 per ounce. Silver spot price closed at $25.43 per troy ounce.

Having a diverse mix of gold and silver in your portfolio can offer some financial protection against uncertainty in other markets.

Having a stack at home also helps you to gain the financial independence to be your own bank.

Premiums at online precious metals retailers vary. Whether you’re looking to stack fractional gold, 10 oz silver bars or other physical bullion investments, FindBullionPrices.com can help you find the best deals.

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Brazil & China to Start Trading in Renminbi, Japan Buys Russian Oil Above Price Caps

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The dollar is quickly losing ground in the global south as BRICS countries initiate trade deals in local currencies.

China and Brazil announced this week a new trade deal that will be settled in their own currencies. The news comes amid reports that the Chinese RMB has surpassed the Euro to become the currency with the second largest reserves held by Brazil.

Yet, the dollar still represents more than 80% of the countries foreign reserves.

The central bank report also shows that the value of Brazil’s international reserves lost over $37.5 billion in 2021 and 2022, due in large part to lower returns amid the US Federal Reserve’s rate hikes and dollar manipulation.

China has been Brazil’s largest trading partner, overtaking the United States in 2009. China has pledged to continue making significant investments in the largest economy in South America, with major spending across energy, mining, agriculture and information-and-communication technology.

As of February 2023, the Central Bank of Brazil reported gold holdings worth $7.602 billion, down slightly from $8.103 billion in March of 2022. It’s probable that some of the gold that China has been stockpiling was exchanged for yuan.

China continues pushing trade in the southern hemisphere moving bilateral trade agreements away from the dollar as part of the overall “One Belt One Road” initiative.

The Bank of International Settlements (BIS), the driving force pushing for global CBDC adoption and the organization that controls the SWIFT banking network lists gold bullion as a Tier 1 asset alongside United States Treasury Bills.

Rio-based Banco BOCOM BBM, a subsidiary of China’s fifth largest bank will be connected to the Cross-border Interbank Payment System (CIPS), bypassing the SWIFT network to support trade settlements directly in renminbi.

BRICS countries have been buying gold and stocking up their reserves in anticipation for more than a decade establishing stronger trade ties among the emerging economies. Over the last decade, Russia alone has quintupled their central bank gold holdings affirming its strong leadership role with the emerging Moscow World Standard for clearing commodities outside of Western manipulated markets.

Central Banks will continue to buy gold in large amounts to provide scaffolding for larger bilateral trade deals in local currency in preparation for the announcement of a BRICS basket currency that is expected to come during the BRICS Summit in South Africa in August of this year.

The price of gold has been trending higher this year as mainstream and retail investors continue to hedge riskier portfolio holdings due to tremendous uncertainty in the dollar’s global dominance.

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JPM Now Sole Custodian of SLV ETF Holdings

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iShares Silver Trust (SLV) is a bullion backed electronically traded fund that seeks to reflect the performance of the price of silver. The fund originated in 2006 and holds physical silver bars held in custodial vaults.

In a statement released recently from JP Morgan, they currently hold 459,485,125.800 troy ounces of fine silver on behalf of the silver trust.

According to recent shareholder reports from Blackrock, the fund is backed by 458,887,710.00 troy ounces of silver which is 597,415.8 less than what is reported by JPM.

That amount is divided between three of JP Morgan Chase’s vault location in London and New York.

Earlier records have shown that the custody of the silver bars that back the SLV investment trust were spread out across various companies and vaulting locations for diversity of holdings.

Precious metals investors frequently buy shares in the SLV as a way to hedge other investments that are typically thought to be riskier endeavors. By moving all of the silver bars into the possession of a single custodian, the trust may be exposed to some additional risk.

The best way to use precious metals as a hedge is to buy physical gold and silver and store it in your home where you know it will be safe, secure and there when you need it most. As the saying goes, if you don’t hold it, you don’t own it.

Silver futures have been trading down roughly 3% since the start of the year.

Meanwhile, central banks continue stockpiling gold during the first few months of the year as more nations around the world are trying to join the BRICS treaty while oil is now trading in currencies other than the dollar.

China bought up an additional 15 tons of gold in January bringing their total central bank holdings to over 2,025 tons, according to reports from gold.org.

With more and more pressure from climate change advocates on US industries to reduce fossil fuel dependence, Saudi Arabia is expecting China and India to become the largest buyers of Middle East oil.

Over the last two decades, a greenwashing propaganda campaign has been thrust upon the country to label the use of fossil fuels as the leading cause of pollution and worldwide climate change.

In recent years, the rhetoric is amplified by activist infiltration of hedge funds and other large financial institutions under the guise of the ESG movement.

As dedollarization continues throughout the world, financial experts remain bullish that precious metals will remain the basis for much of world trade and gold will play a large role in the BRICS currency basket.

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Gold’s Return to the Economy

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Globally, the dollar has been used as a reserve currency by central banks. Since the 1970s, the petrodollar has been utilized for the trade of oil and energy.

Over the last two decades, elected officials in Washington have weaponized the dollar for political purposes.

In recent years, central banks have been dumping the dollar for gold.

BRICS countries have grown frustrated with the dollar’s hegemony in the global market. In 2022, Russia launched the Moscow World Standard to compete with the LBMA, citing ongoing corruption, price manipulation and enforcing trading practices rooted in nepotism and exploitation of developing countries.

The economic sanctions against Russia and the decades of sanctions against Venezuela are two examples of recent weaponization of the dollar that has raised skepticism of some trading partners outside of the European Union.

Russia, and trading partners Venezuela and Peru, account for 62% controlling stake of the world gold bullion.

Part of the western sanctions against Russia forced the LBMA to reject six of Russia’s key Good Delivery refineries from the exchange. The Moscow World Standard is positioning itself as an open alternative to the LBMA.

Many have accused the LBMA and other western countries of manipulating and suppressing the price of gold and other commodities by pushing the practice of trading in paper derivatives. The Moscow World Standard prices gold in ruble and bans the trading of paper derivatives and encourages new price discovery which could push the price of gold to over $2,500 an ounce.

Some see the rise in demand by central banks buying gold as a signal that countries that have been bullied by Western economic policies as being eager for an alternative system that will create a more equitable system and fairer monetary standard.

The Moscow World Standard was developed by the Eurasian Economic Commission, a coalition of countries that include: Armenia, Belarus, Kazakhstan, Kyrgyz Republic and the Russian Federation.

Western sanctions against Russia have led some countries to reconsider bilateral trade in non-dollar currencies for the first time in decades. China, Russia, India and Iran already have an ongoing effort to establish alternative payment and settlement systems that parallel the SWIFT banking network. Iraq has reportedly begun paying for imports in the yuan, while China has been encouraging use of it’s Cross-Border Interbank Payment System (CIPS).

China quickly became Saudi Arabia’s largest trading parter, with more than 1.76 million barrels of crude oil per day and the Shanghai Petroleum and National Gas Exchange will be enabled to handle the renminbi (RMB) for settling oil and natural gas trades which is adding to the decline of the dollar hegemony.

Long term, the BRICS+ countries are creating competition in the global marketplace for raw materials and commodities that is attempting to break the chains of the LBMA and similar price control organizations.

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BRICS, Central Bank Gold and Oil

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BRICS is loose term created by Goldman Sachs to represent the world’s five leading emerging economies. The original list included four: Brazil, Russia, India and China. South Africa was added to the list in 2010.

Combined, the BRICS nations represent 3.21 billion people, roughly 41.5% of the global population.

Over the last year more stories have emerged in the news about the desire for BRICS nations to seek an alternate currency to the US dollar for their international trade. Often referred to as de-dollarization. The removal of the dollar as the reserve currency used in international trade.

Russia has already established the Moscow World Standard to compete with the LBMA and other legacy markets.

In response to economic sanctions following the invasion of Ukraine, Russia’s gas agency began demanding payments for oil and natural gas in Rubles.

Russia’s Central Bank began exchanging gold for Rubles and many countries are now trading oil on a new gold-standard.

The PBoC, the central bank of China continues adding gold bullion to its reserves and holdings.

Worldwide central Bank gold holdings have now reached their highest point since the 1970s.

The 1970s was a time of global economic crisis. Following the oil crisis of 1973, Nixon led the collapse of the Bretton Woods system as part of his measures to fix the stagnant economy.

Nixon resigned in August of 1974 following the Watergate Scandal. Days later, President Ford signed legislation which repealed Roosevelt’s executive order restricting private gold ownership.

This global appetite for gold has the potential to give emerging nations an advantage over the value of their assets and international trading dynamics.

Many emerging nations are rich in oil, minerals and mining. Some of which are necessary components in the development of batteries, solar panels and other advanced manufacturing.

Private ownership of precious metals now continues to grow every year. During the pandemic, from 2020 until 2022, investors bought more than 75 million troy ounces of American Silver Eagles.

The US Mint has been unable to keep up with investor demand which has caused premiums to rise.

Over the same period gold investors bought more than 5 million troy ounces of Gold Eagle and Gold Buffalo coins.

Government silver coins from Canada, United Kingdom, Austria have become popular alternatives for investors looking for lower premiums.