It’s no secret that BRICS countries are buying gold at unprecedented rates, which is the main reason gold is appreciating in value so quickly. Speculation suggests BRICS is planning a gold-backed exchange currency to facilitate further movement away from the US dollar as the default currency for settling international trade.
I have asked the Reserve Bank about this on several occasions, highlighting Australia’s puny gold reserves as compared to Russia (a similarly sized economy) and China. Once again, the answer I received indicates the Reserve Bank has its head in the sand on this issue.
Our economy is so closely tied to the United States that a new exchange currency will “free up” a huge amount of US dollars, which will have significant consequences not just for the USA but for major trading partners such as Australia.
Australia must respond to the threat of a new exchange currency by expanding our gold holdings as a hedge against an upheaval in the currency market. One Nation will expand our gold reserves and reduce our exposure to the US dollar—both currency and treasuries.
Transcript
Senator ROBERTS: Okay. Let’s move on to gold. Your most recent balance sheet shows gold and foreign exchange assets at $105 billion. How much of that is in gold, and how much has our gold holding changed? Could you provide the tonnes of gold and the value?
Dr Kent: Our long-term gold holdings are still 80 tonnes, which is around 6,430 bars.
Senator ROBERTS: That’s 6,430 bars.
Dr Kent: Yes. That has not changed since 1997. The value as at September was around $9.7 billion.
Senator ROBERTS: Where is that gold physically located, and has the holding been audited since the 2022 audit?
Dr Kent: I don’t believe it has. Another audit is coming due; I would have to take on notice exactly when. It is almost all held in the facility at the Bank of England.
Senator ROBERTS: Thank you very much; I like your precise answers. Saudi Arabia has just been detected as buying 160 tonnes of gold, and the People’s Bank of China bought 1,600 tonnes of gold over the last three
years. China now holds more than 2,000 tonnes. Russia now holds 2,300 tonnes. This is a large element of the demand inflation in the gold price. Are you concerned that BRICS is up to something that needs gold? Should we be increasing our holdings as a precaution?
Dr Kent: I have no intimate knowledge as to why they are purchasing that gold. I don’t think it has implications for us.
Senator ROBERTS: So you’re not concerned?
Dr Kent: No.
Senator ROBERTS: BRICS have the capacity to pull the rug out from underneath the dollar, and, in my opinion, Australia should mind that risk. What are our current holding of US Treasury notes and currency?
Dr Kent: I will have to get back to you with the precise figure, but it’s an important part of our foreign exchange reserves.
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