Russia will create new BRICS Precious Metals Exchange to become ‘key regulator of prices’ – Finance Ministry

(Kitco News, Thurs. Oct. 24th, 2024) – Russia has proposed that BRICS member countries create their own precious metals exchange in a move that could upend the long-established international pricing mechanisms for gold, silver, platinum, and other precious metals.

The news comes on the heels of Wednesday’s declaration adopted by the leaders of the BRICS countries supporting an increase in the exchange of precious metals between members on the basis of common product quality standards.

On Thursday, the Ministry of Finance of the Russian Federation made their own official announcement.

“The creation of a mechanism for trading metals within the BRICS countries will lead to the formation of fair and equitable competition based on exchange principles,” the Ministry said in a release, according to Russian news service Oreanda.

“The mechanism will include the creation of instruments for price indicators for metals, standards for the production and trade of bullion, accreditation of market participants, clearing and auditing within the BRICS countries,” said Russian Finance Minister Anton Siluanov, “and the participating countries will have a reliable way of stable exchange trading within the association.”

The Finance Ministry added that they expect the BRICS Precious Metals Exchange “will become a key regulator of prices for precious metals.”

Gold-backed BRICS currency

Andy Schectman, President and Owner of Miles Franklin Precious Metals, told Kitco News in a recent interview that this week’s BRICS summit might hasten a global financial reset that could see gold revalued at up to $150,000 an ounce.

According to a whitepaper, the ‘Unit’ would be pegged 40% to the value of gold and 60% to a basket of BRICS national currencies. It is designed as an “apolitical currency,” addressing the concerns of countries worried about the weaponization of the U.S. dollar.

“Let’s call it a quickening, if you will, an acceleration of this de-dollarization movement and into a new system,” Schectman said. “That potentially could indeed be backed by gold.”

“What they are talking about is a new system,” he added. “The most probable outcome is, unless we beat them to the punch, that something happens where there is no longer an incentive to own U.S. dollars or Treasuries.”

BRICS members, along with other central banks around the world, have been accumulating gold at near-record levels these past several years. In addition, central banks worldwide have also been repatriating gold to store it within their own borders.

“A simple Google search will show you central banks bringing their gold back from the Bank of England and the New York Fed – Germany, Austria, Slovakia, Argentina, the Netherlands, Saudi Arabia (just a few weeks ago), Hungary, Hungary, Belgium, Egypt, Senegal, Romania, Nigeria. Poland, Ghana, India … Turkey, France, Serbia, Venezuela, Algeria, Cameroon, South Africa, Czechoslovakia. The list goes on,” Schectman said. “The conventional wisdom will tell you that’s because of the weaponization of the Treasury market. That’s probably part of it. But if you look deeply at the new proposed settlement currency, the ‘Unit,’ it talks about how countries can mint this new settlement token using the gold held within their borders.”

Schectman outlined four scenarios of how this potential global financial reset could play out, and one scenario involves revaluing the level at which gold is priced. “Suppose the U.S. holdings are above 8,000 metric tons, which hasn’t been audited in forever, by just revaluing gold to a level that makes our balance sheet balanced with the liabilities with our now higher asset level.”

“In that case, it’s a different game,” Schectman said. “You put gold at $150,000 an ounce. As crazy as that sounds, your balance sheet is now pristine.”

“If you are trying to reset the system, you destabilize what made this country great and what incentivized people for years to want to invest in this country,” he added. “The banks that are over-leveraged and under-capitalized, the insurance companies, the real estate market, the bond market, and the stock market all implode simultaneously. You issue your new CBDC pegged to gold, and there you are.”

“Gold will go to a level no one thinks possible, and it will be pegged to a new system and never come down.”

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com