The Decline of Western Control Over Gold Prices

An important change has unfolded in the global gold market. The East has been driving up the gold price, predominantly in late 2022 and the first months of 2023, breaking the West’s long-standing pricing power. Gold’s recent trends can be attributed to clandestine buying by emerging market central banks and robust private demand in Turkey and China. Despite a decline in the US dollar gold price recently, it is unlikely to fall to levels suggested by the rates model as central bank buying is expected to remain robust, according to Metals Focus. If the East can further drive up gold prices and diminish the West’s control, gold may become less reliant on the dollar and play a more prominent role in the international monetary system.