Why Are BRICS Countries Buying Gold?

Gold has been considered as a precious metal for centuries. Gold is rare, durable, and universally accepted. In contrast to fiat currency, gold does not need issuance from any specific country. It is this feature that makes gold stay among reserve assets till today.

As of April 21, 2026, the price of gold is hovering around $4,800 per ounce. At first glance, it looks like a price story. But this is not true. The real story is hidden behind the purchases made by BRICS countries.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

This buying tells us how major emerging economies now see risk. It also shows how their trust in the global financial system has changed. The shift is something that didn’t happen suddenly; there was a turning point in 2022.

Turning Point of 2022 - Freezing of Russian Sovereign Reserves

Following the war between Russia and Ukraine, in 2022, several Western nations (the U.S., E.U., and G7 allies) froze about $300 billion worth of Russia's sovereign foreign reserves. These reserves were predominantly in U.S.D, euros, and other forms of fiat assets kept in foreign custodians. The same reserves constituted roughly 50% of Russia's overall $640 billion worth of reserves which were immobilised overnight. Russia could not access these frozen assets for their trade, debts, and stabilisation. This highlighted the susceptibility of the fiat system to being used as a geopolitical tool.

For most countries, this became the real eye opener. It made them realise that the reserves they had in a foreign currency could easily be frozen.

Central banks across the BRICS nations started to think differently. They had one question on their mind. If a large share of reserves sits abroad, how much of it is truly ours in a crisis?

This thought process became the foundation of many subsequent actions we have seen till date, especially the shift towards gold reserves.

For this purpose, it is crucial to take into account the entity that pushes for such changes. This leads to consideration of BRICS and the countries comprising this block.

What Is BRICS and Who Is In It

BRICS is an intergovernmental entity consisting of ten countries. The composition includes Brazil, Russia, India, China, and South Africa. With time, new members have been added to this club. Egypt, Ethiopia, Iran, and the United Arab Emirates entered the bloc in 2024. Indonesia was admitted at the beginning of 2025. These countries together comprise almost one-fourth of the world’s GDP and almost one-half of the world’s population.

Why Gold Became the Answer

1. Reducing Dollar Dependence

For many decades now, the dollar has been the currency dominating the world economy. Nations conduct their business using it. Reserves in central banks consist mainly of dollars.  For a long time, this felt safe and practical.

However, things seem to be changing. When a country holds too much in dollar assets, it depends on systems beyond its control. Usually, this will not create problems. However, in case of diplomatic issues, access to such resources may be jeopardised.

This is the reason why BRICS countries are reducing their overdependence on the U.S. dollar. Gold becomes an extremely natural partner in this process, as it enables them to reduce reliance on such external factors.

2. Shielding Against Sanctions

Another reason is more defensive in nature. Sanctions are becoming increasingly frequent in international affairs. Once they are issued, foreign assets may be frozen.

However, the case is different when it comes to gold. Gold located in a nation’s own territory cannot be influenced by any outside measures. There is no intermediary who can block access. No system that can be switched off. This makes gold attractive in uncertain times.

3. A Reserve Asset that is Neutral

Finally, gold also has the distinction of being neutral. This means that it has no issuer, nor does it have any political sponsorship. Its value does not depend on the policies of any government. It allows countries to hold and transfer value without stepping into geopolitical alignments.

The Road Ahead

The growing tendency of purchasing more gold by the BRICS nations is not likely to ease soon. The reasons behind it remain firmly in place, and recent developments only strengthen this trend.

Over the last several years, some BRICS nations have initiated the use of their own currencies for international settlements. To mention a few examples, India and Russia engaged in energy exchanges in rupees and roubles. In addition, China has sought to increase the role of the yuan in international trade operations, particularly involving exporters of commodities. These are small steps on their own, but together they show a clear effort to move away from dollar-based settlements. While a full replacement is still distant, the intent to build parallel systems is now visible.

Conclusion

As these efforts take shape, one challenge becomes clear. Countries need a common reference point that all sides can trust, especially when they move away from a single dominant currency system. And here is where the importance of gold emerges. Gold provides an established ground that is easy to value. Because of its neutral nature with regard to politics, it fosters trust between the trading nations.