BRICS members’ gold reserves are not anti-dollar; they’re anti-monopoly

The global monetary landscape is undergoing a gradual but meaningful transition. As BRICS nations now control nearly 50% of global gold production and hold a substantial share of official gold reserves, this development carries significant implications for the long-term dominance of the US dollar in the worldwide economy.

What we are witnessing is not an abrupt rejection of the dollar, but a steady reduction in over-reliance on it. Confidence in fiat currencies, particularly the US dollar, has been eroded over time due to persistent monetary expansion following the abandonment of the gold standard in 1971. Excessive money printing by Western economies to stabilise growth cycles has diluted purchasing power and raised concerns around currency debasement. In response, central banks are increasingly reallocating reserves towards hard assets, with gold emerging as the preferred hedge against monetary uncertainty and geopolitical risk.

The shift has accelerated since 2022, after Western sanctions led to the freezing of Russia’s dollar-denominated reserves. That episode fundamentally altered how emerging economies perceive the safety of reserves. Since then, the BRICS bloc has been actively strengthening its push towards a multipolar monetary system, reducing dependence on the dollar and US Treasuries while expanding gold holdings and local-currency trade settlements.

What makes gold appealing to central banks?

Gold’s appeal lies in its neutrality. It is not tied to the policies of any single country, cannot be sanctioned, and offers long-term protection against inflation, currency debasement, and financial fragmentation.

While the US continues to hold the world’s largest official gold reserves, BRICS nations collectively now have over 6,000 tonnes. Russia and China alone account for more than 2,000 tonnes each, while India’s reserves exceed 800 tonnes. At the production level, China and Russia remain among the world’s largest gold miners, giving the bloc growing influence over the physical supply chain.

This control over production and reserves significantly enhances BRICS’ strategic leverage. It allows member nations to diversify away from dollar-centric systems while laying the groundwork for alternative settlement mechanisms. China, for instance, has been steadily reducing its exposure to US Treasuries while increasing its gold reserves, signalling a deliberate move to lower its dependence on US monetary policy and financial volatility.

At the same time, trade settlement in local currencies across BRICS and Eurasian economies is expanding, further reducing the dollar’s role in cross-border commerce. Experiments with digital and asset-backed settlement instruments underscore a broader ambition: to build a parallel financial infrastructure that is less vulnerable to Western sanctions and policy influence.

De-dollarisation: Bid to rebalancing

Importantly, this transition does not imply the collapse of the US dollar. Dollar supremacy will take years, if not decades, to meaningfully dilute. De-dollarisation should be viewed as a rebalancing rather than a rejection: a shift from a single-currency system to a multi-currency, multi-reserve framework. In this emerging order, gold plays a central anchoring role.

In essence, de-dollarisation is not anti-dollar; it is anti-monopoly. The growing dominance of BRICS in global gold production and reserves sends a clear signal that hard assets are once again being treated as a form of money, not merely commodities. As trust in paper currencies wanes and geopolitical risks escalate, gold is being repositioned as a strategic monetary asset.

Over time, the dollar’s dominance is likely to be diluted, not destroyed, while gold regains prominence as the ultimate store of value in a fragmented, multipolar global financial system.

(Author is the founder of SS WealthStreet. The views and recommendations expressed are those of individual analysts or broking firms, not Mint.)