, and gold is a globally recognized constant currency. Although since the 1970s, the United States has unilaterally announced the abolition of the Bretton Woods system gold standard , causing the US dollar to decouple from gold, but through the figure below, it can be clearly seen that the light of gold has existed for more than half a century, and the US dollar has been depreciating continuously. At the same time, the central banks of many countries around the world pay more attention to gold.
For example, Russia, Turkey , India are all major buyers of gold in the world, and in this process, Russia and Turkey have been close to clearing up the core assets of US dollar type US Treasury bond . India is also constantly hoarding gold. Since the beginning of this year, it has continued to break a series of restrictions on the US dollar and continuously purchased commodities such as Russian oil and coal. In addition, the settlement currencies used mainly include various non-US dollar currencies such as RMB, rubles, UAE's dirhams. According to people familiar with the matter, it also includes some gold transaction settlement.
and World Gold Association report shows that in the first three quarters of this year, the total purchase of global central bank increased to 673 tons, higher than all the annual total since 1967. In the third quarter, global central banks increased their holdings in gold at the fastest pace in 55 years. It is worth noting that this is a key signal that global central banks are accelerating their gold stockpilings away from the US dollar when the US dollar is constantly appreciating.
And when some central banks account for more and more foreign exchange reserves , gold accounts for more and more, in the future, it does not rule out re-anchoring the issuance of local currencies in gold, or directly using gold for trade settlement. In this regard, Türkiye's official once directly stated why global commodity transactions need to be settled in US dollars? The Fed can print the US dollar at will, or use currency tightening to harvest the global interest rate spread , which is an unfair currency phenomenon. The Fed cannot print gold, so we use gold to trade commodity and to raise .
Indeed, since this year, people have witnessed the Fed's omnipotent currency tightening, and the US dollar has risen and other currencies have fallen. Conversely, when other currencies and gold counterattack, the US dollar is overshadowed. It is worth noting that Ghana has also officially announced that it will replace the US dollar with gold and trade oil. This means that in the future, whether Ghana imports crude oil from Russia or the Middle East, it is possible to purchase gold.
It is worth mentioning that The latest data released by the State Administration of Foreign Exchange on December 7 showed that in November, China increased its holdings of 1.03 million ounces of gold, and its holdings reached 63.67 million ounces, or 1,980 tons. This is also the first time since September 2019 that China's gold reserves have officially increased its gold reserves in three years after basically remaining at 1,948 tons.
UBS analyst Giovanni Staunovo said that as part of the total reserve, China's open gold holdings are still very low, so there may be room for further increase in gold in the future. Meanwhile, China's increase in gold reserves may be part of a reserve diversification plan rather than a single dollar reserve.
This provides imagination space for future global economic and trade further to further increase gold choices for commodity currency settlement.At the same time, since the start of international trading in 2018, crude oil RMB futures have achieved the top three results in the world, with the global oil market accounting for more than 6%. At present, Shanghai has formed a 24-hour continuous trading range with New York and London, and even American traders continue to keep a close eye on the night trading of oil RMB futures.
Former UK central bank governor Mark Carney said that half of international trade is currently denominated in US dollars, but with the transformation of economy and trade, the disconnect between reality and finance may decrease, and other reserve currencies may appear in the process. I expect these will be existing currencies, and the RMB provides the option to bypass traditional US dollar events, among which the value of crude oil RMB futures has been continuously reflected.
For example, as Iran continues to break through the US dollar limit and Iranian oil continues to ship to Asian markets, most settlements are conducted in RMB or euros. Relevant data from Iran shows that the share of RMB assets in Iran's international reserves has reached 20%. Iran has officially announced several months ago that it would list the RMB as the main foreign exchange currency to replace the foreign exchange status of the US dollar.
Immediately afterwards, Russia has also replaced some functions of the US dollar with RMB. For example, in the past nine months, Russian companies' use of RMB has increased dramatically. The Russian Central Bank said the renminbi's share of Russian currency trading volume soared from 3% in March to 33% in November. Market participants not only purchase RMB with rubles, but also transfer part of the funds from the US dollar and the euro into RMB.
At the same time, some Russian companies have begun issuing bonds denominated in RMB , while some banks provide RMB deposit services. What is more noteworthy is that Russia and China are increasingly turning to their local currencies in trade, and there are reports that nearly half of the transactions between the two countries are in rubles and renminbi.
And at this moment, something even more unexpected happened again. According to multiple sources, Saudi Arabia, the world's largest oil producer and the dominant country of OPEC ( Organization of Petroleum Exporting Countries ), intends to use RMB to sell oil to some Asian buyers, which will end the oil dollar agreement signed by Saudi Arabia with the United States in the 1970s. Saudi Arabia previously claimed that if the United States passes an anti-OPEC bill, Saudi Arabia will immediately switch to non-US dollar currency to trade oil, and the US dollar is the ultimate core option.
. If Saudi Arabia starts to use these methods to dollarize , its influence will spread to every corner of the world. First, OPEC's 13 member states, Saudi Arabia, Algeria , Angola , Congo , Equatorial Guinea , Gabon , Iran, Iraq , Kuwait , Libya , Nigeria , UAE, Venezuela de-dollarization is natural.
and as we have mentioned many times, several oil countries including Venezuela, Iran, the UAE have begun to try to de-dollarize in different ways. Secondly, in addition to Russia's 10 countries, in addition to the current de-dollarization of Russia, it is also natural for the nine countries of OPEC+ to de-dollarization of Azerbaijan , Bahrain , Brunei , Kazakhstan, Mexico, Malaysia , South Sudan , Sudan , Oman , etc. In addition, OPEC's 13 countries, that is, at least 23 oil countries around the world responded and started the process of de-dollarization.
Not only that, in the global non-dollar payment system, currently, China's cross-border interbank payment system CIPS has 77 direct participants and 1276 indirect participants, including 975 in Asia (including 552 in the country), 185 in Europe, 47 in Africa, 29 in North America, 223 in in Oceania, and 17 in South America.
. Several recent signs also indicate that Saudi oil companies are constantly increasing their approach to the CIPS system and the financial trading systems of many countries.In response to this, the American Silver PhD website said that the US dollar collapsed! If this happens, such a combination will account for more than one-third of global GDP, more than 25% of global oil production, about 40% of global steel production, and about half of world agricultural production, analysts said. The petrodollar will end especially if Saudi Arabia sells oil to its major customers in non-USD currencies. From this perspective, whether the petrodollar will end is in the hands of Saudi Arabia and the big buyers.
In fact, another key signal has been sent in Saudi Arabia's multiple layouts to get rid of the petrodollar. According to the latest international capital flow report TIC as of September released by the U.S. Treasury Department in mid-to-late November (the data is delayed for two months), Saudi Arabia has generally shown a continuous net selling of US bonds since February 2020. U.S. bond 's holdings in have fallen from a peak of US$184.4 billion to a low of US$121 billion. In two years, Saudi Arabia has sold a total of US$63.4 billion in US dollars, with a cumulative net selling ratio of as high as about 35%. (End)
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