Victory for Samba Dancers: The WTO

WTO Brazilian chief

One of the fastest growing economies in the world, member of BRIC, the 7th largest country in terms of Gross Domestic Product (GDP) and Purchasing Power Parity (PPP), the new head the World Trade Organization (WTO); Brazil.

This charming land depended mainly on tourism and agriculture exports to grow their economy. But in the last decade, Brazil was moving towards a reformation in order to find her place among the world’s new order.

The merry land of Brazil shifted their focus towards industry, which ultimately needs minerals to work with. Copper, Iron and silicon are the basic needs for any country looking for developing their industrial sector.

In order to protect their hard work for the last decade, they do what every growing country do, diversify their reserve. In 2012, Brazil gold reserve counted for 0.5% of national reserve, with 52.5 tons of gold. Even if they have four mines that haven’t depleted yet, the Brazilians decided to increase their gold reserve. And they did.

In November 2012, Brazil doubled its gold holdings from November 2000 to November 2012, to record 67.2 tons, making 0.8% of their reserve. Similarly, Turkey, China and Mexico were trying the same. These emerging countries’ central banks are looking for a bigger share in the gold reserve list. This list holds the U.S., Germany, Italy and France having 70% of the reserve gold in the world.

Large co-operations like SPDR Gold Trust, and other ETFs backed by gold reported a record lows in their vaulted gold. SPDR Gold Trust, the largest bullion-backed exchange-traded product (ETP) reported currently 1057.79 tons of gold held in their vaults, a record low since March 2009.

All this gold leaking from the advanced world goes to these hungry-for-growth countries. Some of the emerging economies pursue their goals more aggressively, such as India and China, and others prefer a rather laid-back approach. With the new position, head of the WTO, we may see Brazil or member of BRIC expands even more in the mining industry or buy more gold. Either way, these are good news for the “gold bugs”.