Historic price jump zlata at more than 5.000 dollars per ounce should be a serious warning, because it is a reflection of distrust in dollar. In the long term, this is worrying for the entire Western financial system, because the share of the dollar in it is three or four times higher than the share of the euro, economic adviser Bogdan Petrović told Vreme.
He points out that it is a reflection of distrust in the dollar system caused by the actions of the US president Donald Trump.
"Because of his moves, safety is sought in gold instead of the dollar." Financial the markets do not like threats of high tariffs and inconsistent moves, so it is not surprising that the price of gold jumps a lot," explains Petrović.
He reminds that Serbia has part of its foreign exchange reserves in gold. According to the data National Bank of Serbia that share is slightly higher than 20 percent.
"In addition to the rise in the price of gold, there was also a drop in the value of the dollar compared to the euro. Therefore, if we look at our foreign exchange reserves in dollars, then we did very well, because the price of gold in euros did not jump as much as the price of gold in dollars. Our foreign exchange reserves are pleased with the rise in the price of gold, because they increase mechanically just because part of those reserves are in gold," says Petrović.
Sign of fleeing from the USA
He also notes that significant central banks such as China and Russia are watching how SAD they are expanding their sanctions.
"Unlike Serbia and NIS sanctions, where the USA can live off of it indefinitely, Russia and China want to avoid this by fleeing from the dollar to gold, i.e. reducing the share of the dollar in their foreign exchange reserves and increasing their gold stocks. The share of the dollar is also decreasing in the world trade. That is why all of this is of long-term concern for the Western financial system, because its share is three or four times greater than the share of the euro. The rise in the price of gold is a sign of fleeing from the US," says Petrović.
He points out that it would be wrong to attribute the rise in the price of gold to Trump alone, because it increased during the Biden and Trump administrations, and in response to the corona virus pandemic, i.e. the economic crisis.
"The problem is the huge American debt and the fact that the USA exerts great pressure with sanctions, which leads to large economies reconsidering the possibility of keeping their foreign exchange reserves in gold instead of dollars. The dollar becomes unreliable because Trump can impose sanctions on someone at any moment," concludes Petrović.
