The dollar is getting dumped by one of the globe’s largest oil producers and exporters. Russia’s Rosneft has decided that it will ditch the dollar in favor of euros for all deals going forward. The switch could potentially limit the effects of any sanctions imposed by the U.S.
The company is Russia’s largest oil company, exporting some 120 million tons per year. The company’s move to euros is likely a direct response to threats of U.S. sanctions for its re-selling of Venezuela’s oil to Asian countries. The move has effectively allowed Venezuela to sidestep U.S. sanctions, bringing another blow to the dollar.
The move away from the dollar is not the first and won’t be the last.
Several nations have already established swap lines to facilitate transactions outside of U.S. dollars and that trend could be set to continue.
The move comes at a time when the dollar’s appeal as the global reserve currency of choice could be weakening. It was recently reported that China added another 5.9 tons to its gold reserves last month, and central bank buying for the year appears headed for record territory. Against the current economic and geopolitical climate, the significant purchases by the globe’s largest financial institutions should come as no surprise. The ongoing U.S./China trade war, Brexit, Hong Kong unrest and Middle East tensions are just a few sources of geopolitical angst that has many countries looking to add to their reserves.
As the global currency market changes and as the dollar falls out of favor as the global reserve currency of choice, gold is likely to take on an even more important role.
Central banks recognize the value it brings to the table, and not just because of its upside value potential. Gold can also act as a significant hedge against dollar weakness, inflation, geopolitical risks and more. It is also extremely valuable for diversification purposes, as it has little to no correlation to traditional asset classes like stocks or bonds. There simply is no other asset class that has the history and reliability of physical gold.
If the most powerful financial institutions on the planet see fit to buy massive amounts of gold, shouldn’t you consider a significant allocation as well?
Adding this key asset class to your portfolio has never been easier, and perhaps never more important. Speak with an Advantage Gold account executive today about the potential benefits of gold ownership and to learn more about the role it may play going forward. Our associates are here to answer any questions you may have and can even show you how to build a significant allocation using an IRA account.
Don’t wait for the next major stock market collapse or for the dollar to weaken further before acting. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: china, global reserve, oil exporters, oil producers, Ronfet, russia, US sanctions, Venezuela