It was recently reported that Russia had heavily divested from American debt, with holdings falling by half in April 2018 according to data released by U.S. Treasury Department. The former Cold War Super Power is following suit with China and buying Gold. Readers will also note that China too has heavily divested from American debt as well. In 2014 China held nearly 20 trillion dollars in American debt, but by 2018 they had cut holdings by 90 percent.
Additionally, a closer look at Treasury numbers indicates regional investment trends worth noting. While U.S. debt investment numbers have been modest since 2017; Asian and Middle Eastern countries share an overall downward trend. European and Latin American nations are holding steady with modest fluctuations. The question then becomes, where will the investments go if not the United States as a sure place to hedge? Gold has been the answer for both Russian and China who appear to be fortifying themselves to be major independent players in the future.
As Gold becomes the prize commodity for international investment, that puts a major spotlight on Gold producing nations—most especially those in Africa.
The rush for Gold offers a rare opportunity in time for Africa which has supplied nearly 60 percent of the world’s Gold. Africa’s gold producing nations are then at a critical juncture regarding mining, production and refinement. States like Ghana, Nigeria, South Africa and others that produce have a finite window of opportunity to truly cash in on the Gold Rush fueling the new world commodity order. African states often lose out on gold trading, because it does not refine its own gold and therefore cannot get market value.
The push toward Gold will be a windfall for Gold sellers and refiners as well as mines—but only time will tell if Africa will cash in on that burgeoning market by refining its own gold and cutting out the middle man. Apart from South Africa, Uganda’s AGR is the second largest refinery in sub-Saharan Africa. In May 2018, according to a release from Reuters, a privately held UAE gold trader is planning to open two refineries in Africa. The estimated $246 million-dollar project, headed by Sakthi Trading Group will target Ghana and the Democratic Republic of the Congo. While certainly an ambitious initiative, the plant will not be wholly locally owned by African states or stakeholders.
Will Africa miss it’s own gold rush?