Why are the BRICS accumulating gold?

Several countries are reinforcing their gold holdings to reduce dependence on the U.S. dollar.

The escalation of geopolitical tensions since 2022 — marked by wars, economic sanctions, and asset seizures — has accelerated a shift in the global monetary system. In this context, BRICS countries like China, Russia, and India have been increasing their gold reserves at a record pace, reflecting a rising demand for security.

This strategy is a direct response to the use of the dollar as a tool of coercion, the institutional vulnerabilities of the SWIFT system, and the real risk of international asset freezes, as seen in 2022 with Russia. As a result, they helped pave the way for a multipolar financial system backed by real assets and supported by central bank digital currencies (CBDCs).

Global gold demand in 2025

The World Gold Council (WGC), the leading global authority on the gold market, monitors gold supply and demand, offering reliable data to investors, governments, and central banks. Headquartered in London, the WGC is a global benchmark for understanding how gold impacts the world economy. Its April 2025 report shows Q1 gold demand hit 1,206 tonnes — the highest since 2016 —driven by central banks, investors, and technology sectors.

In addition to the 244 tonnes purchased by central banks — led by BRICS countries like China, Russia, and India—other sectors have also contributed significantly to demand. Investment funds (ETFs) led the surge, acquiring 552 tonnes, reflecting geopolitical uncertainty and stock market volatility. Retail demand was also strong, especially in China, with 325 tonnes in bars and coins, while the tech sector consumed 80 tonnes, boosted by the growth of artificial intelligence.

The report suggests that gold has gained value due to factors such as global tensions, a weakening dollar, and fears of trade tariffs, particularly those proposed by the U.S.

Tipping point: the dollar as a political weapon

The seizure of approximately $300 billion in Russian foreign reserves by the U.S. and European allies following the 2022 invasion of Ukraine marked a turning point. At the same time, the exclusion of Russian banks from SWIFT (Society for Worldwide Interbank Financial Telecommunication) exposed the degree of geopolitical control over a system that was presumed to be neutral.

These actions sent a global warning: any country at odds with G7 political interests could see its assets frozen or its financial system disconnected.

Another contributing factor was the Federal Reserve’s expansionary monetary policy, which injected more than US$3 trillion into the economy between 2020 and 2021 to counteract the effects of the pandemic, according to official Fed data. This raised worldwide fears about the dollar’s reliability as a store of value.

The decline of trust in the dollar

Such trends reflect the dollar’s declining dominance.

IMF data shows the dollar’s share of global reserves dropped from 70% in 2000 to 57% in 2024. Meanwhile, currencies like the yuan and euro have gained ground, and gold demand has returned to historic levels.

According to the World Gold Council, central banks purchased over 1,136 tonnes of gold in 2024 — the second-highest annual volume on record. Gold prices have responded accordingly, reaching $3,444.60/oz in June 2025—a 47.17% increase in just 12 months.

So, why are the BRICS accumulating gold?

• Protection against Sanctions
  Gold is independent of international financial intermediaries. Unlike dollar reserves, it cannot be frozen by foreign governments or controlled by networks like SWIFT.
• Backing for CBDCs
  CBDCs, such as China’s e-CNY and Brazil’s Drex, may use gold as partial backing, lending credibility and insulation from base-money inflation. According to Brazil’s Central Bank, the Drex is being designed for international integration and gradual convertibility.
• Toward a multipolar financial system
  Platforms like BRICS Pay (for local currency payments) and BRICS Bridge (a CBDC connector) are emerging as alternatives to SWIFT. The New Development Bank (NDB) is already considering using gold as a settlement asset for bilateral transactions.
• Hedge against dollar depreciation
  With projections suggesting the dollar’s share of global reserves could fall to 40% by 2035 (according to the Institute of Monetary and International Policy – IMI), gold serves as a long-term strategic hedge.

Possible impacts

Short Term (2024–2026)

• Appreciation of gold and greater central bank reserve allocation.
• Increased liquidity in regional markets using local currencies.

Medium Term (2026–2030)

• Expansion of BRICS Pay with bilateral settlements and gold-backed guarantees.
• CBDCs with partial gold backing gaining traction, including in deals with non-BRICS nations.

Long Term (2030–2035)

• Hybrid system (gold + CBDCs) potentially replacing the dollar in strategic reserves.
• The dollar’s share in global reserves could drop below 40%.

Brazil’s role in the emerging global order

Though still modest in absolute gold volume (around 130 tonnes, according to Brazil’s Central Bank), Brazil plays a strategic role in reshaping global finance:

• Institutional stability at the Central Bank and leadership in CBDC development via the Drex.
• Diplomatic neutrality, positioning Brazil as a potential mediator between blocs.
• Energy and mineral wealth, strengthening the real as a trade currency in key sectors.
• Technological and industrial infrastructure (e.g., Embraer), establishing Brazil as an innovation powerhouse in multipolar supply chains.

A new chapter in the global monetary system

In summary, the BRICS are buying gold to build a financial system less dependent on the U.S. dollar. That shift blends CBDCs (like Brazil’s Drex), local currency trade (real, yuan), and gold  — a globally trusted safe-haven asset, especially in times of crisis.

For Brazil, this is a moment of opportunity. In the coming months and years, the country may boost its gold reserves to protect its economy, strengthen the Drex (soon to be launched for international use), and leverage its diplomatic neutrality to act as a bridge between nations — gaining influence in the emerging global landscape.