FX.co ★ Gold reserves outflow may hit USD

The United States authorities are on alert. Leading representatives of many nations are withdrawing their foreign reserves from the country. This is a serious blow to the US dollar. Some countries have lost trust in the US amid statements about the confiscation of Russia’s currency reserves frozen in the West.

According to the Houston Post, in recent months, several African and Middle Eastern countries have begun to withdraw their gold reserves from the United States. The reason is concern about the stability of the US economy and its reliability concerning the safety of assets.

Nigeria, South Africa, Ghana, Senegal, Cameroon, Algeria, Egypt, and Saudi Arabia recorded the withdrawal of gold exchange reserves. The actions of these states jeopardize the future of the US dollar as the world's main reserve currency, analysts believe. The Houston Post writes that such a situation undermines the greenback's dominance and is gradually destroying it.

This trend indicates significant shifts in the global economic sphere. Against this background, skepticism about the US dollar as a traditional safe-haven currency and US financial institutions is growing globally.

The decision to repatriate gold reserves indicates the strengthening of negative trends. Many states are seriously concerned about the future of the US economy. A driving factor behind these sentiments is the overly permissive behavior of the US when it comes to other nations' finances.

In this light, more and more countries are losing confidence in the US financial system. Analysts suppose that the withdrawal of gold reserves could be considered a protest against US dominance. The refusal to place funds in American banks turned out to be a more effective means of fighting the greenback than previous BRICS efforts aimed at reducing dependence on the dollar.