Middle East and African countries withdraw gold reserves from the United States

Despite the dominance of the US dollar dominating the financial space, apprehensions surrounding the US economy are forcing countries to take staggering steps.

A new development has been observed: countries in the Middle East and Africa are systematically withdrawing their gold reserves from the United States, thereby adding increased pressure on the global prestige of the dollar.

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Why are countries withdrawing their gold reserves from the United States?

Several countries in the Middle East and Africa, including Nigeria, South Africa, Ghana, Senegal, Cameroon, Algeria, Egypt and Saudi Arabia, have decided to withdraw their reserves. gold of the United States.

This decision is triggered by the instability experienced in the US financial system, further aggravated by the erosion of dollar momentum.

“These countries aim to protect themselves from potential financial contagion and secure their wealth within their borders. »

Countries that isolate their assets from centralized financial centers like the United States constitute a stark distinction that the world is slowly moving toward, according to several analysts and commentators. This implies that nations wish to explore alternatives rather than sticking to a single notion.

“Furthermore, this wave of withdrawals underscores a broader trend of geopolitical realignment as nations reevaluate their financial dependencies. They do it to strengthen their economic sovereignty. This decision is not only symbolic. This reflects a pragmatic shift in global financial strategy. Countries are now choosing to diversify their holdings and mitigate their exposure to potential risks emanating from centralized financial centers. As shared by Clint Engler, CEO of CERAC Trader Strategy,

The US dollar is currently in a precarious position, facing increasing debt indicators that are eating away at it. Similarly, comments from US chief economic advisor Jared Bernstein further added fuel to the fire, adding to the dollar’s growing woes.

The challenges facing the dollar

As the BRICS alliance explores the possibilities of launching a new currency, the US dollar now faces fierce competitors to maintain its prestige.

Also read: Chinese yuan threatens to uproot the US dollar

Likewise, as Russia and China echo calls for dedollarization, the dollar now finds itself on the edge, plunging sideways.

“Meanwhile, BRICS led a growing rally around precious metals. Mainly gold, as BRICS seeks to use gold to back their underdeveloped currency. It will use it as an alternative to the US dollar.