Gold prices are at historic highs, buoyed by India and China central bank buying in OTC markets. Further, all-time high levels of gold repatriation are underway, to vaults in Asia. Industry insiders and market experts are puzzled at the intensity and the timing of the gold buys, which seem divorced from economic fundamentals.

But these moves are an essential aspect of the BRICS countries’ de-risking from Western banking systems. Following the sanctions on Russia, whereby billions of dollars of Russian reserves in US and European banks were seized, China and India were strongly motivated to reduce their exposure to Western regulators. China sold off huge portfolios of US Treasury bonds, and both China and India demanded physical deliveries of gold previously held by European custodians.

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