In a seismic shift that's shaking the foundations of global finance, BRICS nations and their new allies are amassing gold at an unprecedented rate, leaving Western investors scrambling to catch up. Although the West is showing signs of awakening, with growing ETF inflows in September, many warn it's too little, too late. As inflation rates soar and economic instability looms, the stark reality of gold's timeless value is becoming impossible to ignore.
BRICS Expansion: A Golden Coalition
Later this month, Russian President Vladimir Putin will host the first-ever BRICS+ summit in Kazan from October 22 to 24. During the summit, the original BRICS members — Brazil, Russia, India, China, and South Africa — will officially welcome Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE) into the alliance. With this expansion, BRICS+ now represents over 40% of the global population, positioning itself as a powerful counterweight to the Western-dominated financial system.
The BRICS alliance has stated more than 30 different countries have expressed interest in joining the economic government conglomerate and leadership continues to consider adding more nations to the roster.
Gold has become a central tool in the coalition's strategy to challenge the economic dominance of the West. As BRICS+ nations increasingly turn to gold to diversify their reserves and hedge against inflation, the bloc signals its intent to reshape global trade and finance. This expanded coalition, with its diverse economic powers, is united in its goal to reduce Western influence and build parallel financial structures.
This chart compares central bank purchases of gold (blue line) to foreign purchases of United States treasuries (orange line). (Source: U.S. Treasury)
All eyes are on the upcoming Kazan summit, which will begin Oct. 22. At this summit, the BRICS+ nations will outline their next steps. We will closely monitor updates from this gathering as the coalition continues its push to make gold a key element in the future of global economic governance.
However, reports this week showed some dissension among BRICS members, specifically India, in regard to de-dollarization efforts.
Indian Foreign Minister S. Jaishankar said India has no plan to target the U.S. dollar, an announcement that placed the Asian country directly at odds with Chinese and Russian rhetoric.
“We have never actively targeted the U.S. dollar,” he said.
See also: Putin Confirms BRICS Developing Independent Payment System
Western Investors: Too Little, Too Late?
As inflation in the U.S. and Europe surges to levels not seen in decades, Western investors are waking up to gold’s enduring value as a safe haven. But financial experts warn that this realization may have come too late.
While Western markets are just now seeing a rise in gold-related investments, the BRICS nations have been quietly stockpiling gold for years. The strategic foresight of countries like China, Russia, and India has positioned them far ahead in the global race for gold.
World Gold Council’s John Reade, who recently surveyed gold buyers in Switzerland, said, “I’m hearing a lot of positivity to gold, but one of the things that keeps coming through is people don’t have as much gold as they’d like to. It’s gone much further than people were expecting.”
Though recent upticks in Western gold ETFs are notable, they barely scratch the surface compared to BRICS' massive reserves. Some analysts paint a stark picture, comparing the West’s last-minute scramble to “bringing a water pistol to a wildfire.” The BRICS nations, they argue, have already built a fortress of gold, leaving Western investors struggling to catch up as economic uncertainty deepens.
Western gold purchases have often been referred to as “fear” trades, while Eastern gold-buying culture typically centers around “love” buying - for jewelry, celebrations or life milestones.
While Western investors have yet to show the fear necessary for massive moves in the price of gold, that tells prospective holders two things: There’s still remaining untapped demand in the market and the West could play a big role in future price increases moving forward.
The Great Gold Exodus: From West to East
Without the West paying attention, vaults in COMEX and LBMA are being systematically drained in a quiet but dramatic shift of physical gold and silver to Eastern treasuries.
Market analysts describe this as an unprecedented transfer of wealth. Asian investors, particularly in China and India, are acquiring physical gold at rates never seen before. Many view this surge as a clear sign of waning confidence in the Western financial system.
Bai Xiaojun, a well-known market reporter, tracks daily prices for physical silver in the Shanghai Gold Exchange (SGE) and Shanghai Futures Exchange (SFE). His reports consistently show that Chinese silver prices average 10% higher than Western spot prices, fueling a gold and silver rush to the East.
Dealers are capitalizing on this price difference, buying from the West and selling to the East, collecting profits from the significant markup.
This gold migration is more than just a financial phenomenon - it marks a geopolitical shift. As Western vaults are emptied and Eastern reserves swell, the global balance of power could be shifting, with the East gaining economic strength.
Exposed: Western Banks' Short-Selling Scheme
As vaults drain, Western banks are being exposed for massive short-selling positions in gold, igniting outrage across financial circles. These hidden positions have led to allegations of deliberate price manipulation aimed at maintaining the illusion of dollar dominance.
However, this risky strategy is backfiring. With prices rising, these short positions are not only bleeding the banks dry but also fueling the East’s growing economic power. As banks scramble to cover losses, nations like China and India are quietly scooping up physical gold at bargain prices. This rapid flow of gold from West to East is leaving many Western investors sidelined, unaware that the game has changed.
The most recent Commitment of Traders (COT) report from the Commodity Futures Trading Commission shows commercial investors holding a massive short positive in gold. (Source: Tradingster)
The scarcity of gold in Western vaults is becoming evident. Experts warn that the days of artificially suppressed prices are numbered, and when this financial house of cards collapses, it may be too late for the West to reclaim its golden lifeline. As the East continues to amass gold, the pressing questions remain: how long can the West sustain this fragile balancing act? And more importantly, what will happen to metal prices when these manipulations finally cease? The answers could reshape the global economic landscape.
See also: Gold Short Position For Banks Reaches All-Time Record
Banks Caught in a Golden Trap: Record Short Positions Spell Trouble
Experts warn we're in uncharted territory. With gold trading above $2,600 an ounce, these banks are bleeding money every day. The question isn't if they'll have to cover their shorts, but when — and at what astronomical price?
Industry veterans are drawing parallels to the infamous silver squeeze of 1980, but on a much grander scale. Some predict this could be the mother of all short squeezes. If gold continues its upward trajectory, we could see a cascading effect of forced buybacks, potentially pushing gold to unimaginable heights.
The Writing on the Wall: A New Global Financial Order?
As BRICS nations continue to amass gold and challenge the dominance of the dollar, the question on everyone's mind is: Are we witnessing the birth of a new global financial system?
China's move to launch a gold-backed yuan and Russia's decision to trade in currencies tied to gold signal that change is already happening. Together with the significant gold accumulation by BRICS countries, these actions suggest a world shifting away from dollar reliance.
Geopolitical analysts caution that the West can no longer overlook this golden revolution. The BRICS nations are rewriting the rules of global finance, and gold is their tool. In this evolving landscape, gold emerges as the clear winner, solidifying its status as a safe haven and a powerful asset in times of uncertainty.
As this high-stakes game of financial chess unfolds, one thing is clear: the shine of gold is hard to ignore. The next few months and years will be a crucial time for the global economy, with gold at the center of a brewing storm that could reshape the financial landscape for generations.
A Wakeup Call to Western Investors: Consider Physical Gold
This shift serves as a wake-up call for Western investors to reconsider their strategies. Renowned investor Ray Dalio recommends allocating at least 15% of your portfolio to gold, emphasizing its importance in a balanced investment approach. He famously stated, "If you don't own gold, you know neither history nor economics." As the global economic landscape shifts, now may be the time to embrace gold's enduring value.
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