The Russian Gold Standard

UN Nations are becoming more aware that it is difficult to isolate a country which is already a major global power. Not just in military terms, but also in terms the world's dependence upon its energy exports.

But, Russia's energy exports do not provide the only benefit for the West. Russia's highest non-energy export, gold, was exported around $15 billion worth of bullion gold last year.

What happens to Russia if the West starts to bother it?

It resolves to find a better way to manage its valuable assets and keep it at a level that is respected by major trading partners. This will be independent of the US dollar's influence.

Another step towards a New World Order

Russia proposed a new international standard to trade in precious metals. The Moscow World Standard (MWS), with the aim of replacing the LBMA, is being proposed.

This is Russia's latest attempt to seize control of NATO countries and the associated institutions and currencies.

Additionally, sanctions against Russia for its invasion of Ukraine are continuing to mount.

The LBMA lifted the suspension of Russian precious metals refining companies in March. At the G7 meeting in June, the G7 countries also imposed a ban on any Russia-produced gold entering the UK or Canada, US, Japan, or US.

Russia's biggest non-energy export is gold, which was estimated to have contributed around $15 billion to the Russian economy by 2021.

Russia was effectively excluded from formal international markets for silver and gold because LBMA is the hub of global precious metals trading, which is located in the UK. Additional sanctions included asset freezing of Sberbank, the Russian state-owned bank.

Dinner Party with Marc Faber and David Morgan

In March 2022, Russia's banks were disconnected from the SWIFT processing network. Our March 3 post, titled SWIFT Ban: A game changer for Russia?

Russia, along with other countries like China and Saudi Arabia, have been pushed to de-dollarize their currencies and establish systems that are independent of the institutions of the G7 countries. Both Russia and China have been vocal in their desire to make the U.S. Dollar the reserve currency.

The problem with this plan is also that there is no solid alternative.

The US dollar's position is being challenged by proposals for a multi-currency system and actions like Russia's demand to pay in rubles. (For more information on Russia's plan to de-dollarize, which includes an increase in gold reserves, see our post titled Russia: A Prominent Play in the Global Gold Market.

Another of these wedges is the latest proposal, which will chip away at existing institutions.

According to media reports, the Moscow World Standard proposal would be an international brokerage that specializes in Moscow.

The price-fixing commission would however include central banks of the Eurasian Economic Union, which includes Russia Kazakhstan, Belarus Kyrgyzstan and Kyrgyzstan.

Large gold players such as China, India and Venezuela would be eligible for membership.

Is there a new gold standard?

The MWS system proposal fixes the price of precious metals at either the national or aggregate level. The price of precious metals is fixed in each country's currency, or at an aggregate level. This can be done with a new currency, such as the BRICS currency that was proposed at the BRICS conference held at the end June.

A new currency proposal to challenge the U.S. Dollar

Leaders of Brazil, India, China and South Africa, five of the world's major emerging economies, proposed a new international reserve currency that could compete with the U.S. Dollar and the IMF's SDR (Special Drawing Rights).

Putin is also quoted as saying:

The matter of creating an international reserve currency is under review. We are open to working with all fair partners.

Turkey, Egypt, Saudi Arabia, and others are also considering joining the BRICS Group.

Putin is quoted saying that

Contracts between Russian business circles, and the business community from the BRICS countries has intensified

He continued to explain that Indian retail chains would be located in Russia and Chinese cars, hardware and other goods would be imported regularly.

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Janet Yellen's friend-shoring concept is working both ways as evidenced by the increased number of contracts signed between BRIC countries. The US wants to source supplies from friendly countries and only want " countries that they can count on".

You can also see the April 20, 2022 post titled A Friend-Shoring of Gold – a New World Order? Apparently, what is good for Yellen may be good for Putin as he has his own circle.

Don't let the reserve currency fool you about the gold price.

One final note on currencies and gold. Due to its status as a reserve currency, the US dollar has seen a surge in this year's dollars. (See David Russell's interview with Brent Johnson on August 4, The Dollar Milkshake Theory Explained).

The U.S. Dollar is the reserve currency so gold is usually quoted in US dollars. In U.S. dollars terms, gold is slightly down year-to-date. But, if you look at gold in relation to other currencies, it paints a completely different picture.

Below is a chart that shows gold's year-to-date performance relative to other major currencies. All are positive.

From the Trading Desk

Market update

On Tuesday, important data from the UK, EU and US was released. The US services PMI dropped sharply to 44.1 in august, down from 47.3 in August.

The market was expecting a flat number.

Even more alarming is that the PMI is below 50, which is what separates expansion and contraction.

This is the lowest level recorded since May 2020's Pandemic Shutdown.

The Euro area PMI data and the UK PMI data were mixed. However, the UK economy is holding up well for now, but on the verge of contraction.

Later today, the US will release GDP numbers.

This is an important number to keep an eye on as it will give us a better understanding of the US's recessionary risks and what that could mean for a September rate increase.

Current market prices are predicting another 75bp increase with St Louis Fed President James Bullard suggesting that the same.

Fed Chair Jerome Powell will deliver a speech on Friday. Being data-dependent, this week's numbers are all the more important to not only the Fed, but also to the gold price.

Gold prices have risen from their recent lows in mid July to early August, on the assumption that the Fed would relax on its tightening policies through rate hikes. However, some of these gains have been reverted on recent hawkish comments and stronger USD.

Stock update

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Gold Coins for Sale


24-08-2022 1752.00 1745.65 1483.59 1483.10 1760.41 1759.79

23-08-2022 1739.45 1746.55 1479.05 1473.04 1752.84 1744.80

22-08-2022 1732.80 1733.25 1467.34 1471.01 1731.24 1737.93

19-08-2022 1752.90 1750.75 1476.12 1480.96 1738.53 1742.00

18-08-2022 1765.60 1765.55 1466.15 1470.53 1737.53 1744.36

17-08-2022 1773.65 1767.20 1465.92 1463.77 1742.97 1737.16

16-08-2022 1776.15 1774.85 1476.16 1469.22 1752.70 1745.92

15-08-2022 1781.45 1776.60 1478.07 1469.78 1748.67 1742.13

12-08-2022 1788.45 1792.10 1472.61 1480.63 1735.87 1746.76

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The Russian Gold Standard was originally published on GoldCore News.

By: Stephen Flood
Title: The Russian Gold Standard
Sourced From:
Published Date: Thu, 25 Aug 2022 12:22:23 +0000

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