A Second Wave Of Inflation Is Coming! What Does That Mean For Gold?

Phil Carr
Published: Aug 23, 2023, 18:57 UTC

The 15th BRICS Summit is officially underway and it’s attracting attention on a global scale like we've never seen before.

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BRICS Summit and Gold-Backed Currency Talks

As leading emerging market powers unveil ambitious plans for a “New World Order” to challenge the U.S and its G7 allies.

The BRICS group of nations – Brazil, Russia, India, China and South Africa are using the annual leaders’ summit this week to enlist more members to bolster global dominance – a push driven mainly by China, but also backed by Russia and South Africa.

Far more importantly, they are using the summit to discuss a new Gold-backed BRICS currency to shift away from the dollar and facilitate trade between the emerging nations – which is undeniable the hottest topic on the agenda, garnering worldwide interest.

The BRICS nations have a slew of reasons for wanting to set up a new Gold-backed currency. Recent global financial challenges, inflationary pressures and frustrations with the U.S weaponizing the dollar to punish countries it disagrees with have motivated BRICS leaders to explore new possibilities.

Worsen U.S-China trade conflicts and sanctions on Russia are just a handful of reasons that have highlighted the risks in using U.S dollars – adding momentum behind a growing “de-dollarization” movement.

According to Goldman Sachs, “the world is witnessing the rise of a “New World Order”.

I know that’s a bold statement, but one that shouldn’t be taken lightly.

Especially, as almost 40 countries have expressed interest in joining the bloc. These include Saudi Arabia, Egypt, Indonesia, Pakistan, the United Arab Emirates and Turkey, just to name a few.

Currently, the five BRICS nations combined, control over 40% of global Commodity production and supply – ranging from the metals, energy to agriculture.

“BRICS Plus” and its Impact on Commodity Markets

An expanded group, known as “BRICS Plus” would control almost 80% of global Commodity production and supply, that’s double the current market share and big enough to unleash long-term inflationary pressures.

In fact, if you want to know what the markets think about the idea of ‘BRICS Plus’ – then you only have to take a look at Commodity prices.

The growing potential of “de-globalization, de-dollarization, and demographics” has sent a total of 27 Commodities including; Aluminium, Copper, Palladium, Platinum, Gold, Silver, Nickel, Zinc to Crude Oil prices skyrocketed to fresh multi-week and multi-month highs.

And this could just the beginning!

That’s bullish news for Commodity traders, but bad news for Jerome Powell and his colleagues at the Fed, who are due to meet later this week at the Federal Reserve’s Annual Economic Symposium in Jackson Hole.

Gold Price Forecast

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

About the Author

Phil Carrcontributor

Phil Carr is co-founder and the Head of Trading at The Gold & Silver Club, an international Commodities Trading, Research and Data-Intelligence firm.

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