Make Kitco Your Homepage

Ghana readies to buy oil with gold, part of 'wider trend' of de-dollarization - E.B. Tucker

Kitco News

(Kitco News) - The global oil market, usually transacted with U.S. dollars, had a surprise last week as Ghana announced it would buy oil with gold. This is part of a "wider trend" of de-dollarization as the world moves towards multipolar "zones" of influence, said E.B. Tucker, Director of Metalla Royalty.

"Instead of just looking at Ghana, you have to notice a wider trend that's developing here, and this is going to create pressure on the U.S. system," he said.

Tucker pointed to the fact that since Russia's conflict with Ukraine, India and China have been purchasing Russian oil, refusing to go along with Western sanctions on Russia.

"India is trying to pursue this policy of neutral alignment with all parties," he explained. "They're also pretty eager buyers of Russian oil."

Tucker spoke with David Lin, Anchor and Producer at Kitco News.

Commodities and 'Paper' Markets

The price of commodities like oil and gold is set on centralized exchanges, such as the COMEX or NYMEX. Tucker suggested that as the world becomes multipolar, countries will refuse to price their goods according to exchange-driven, "paper" pricing.

"Saudi Arabia made a statement that they were going to no longer let people in New York set the price of oil using paper," he said. "The New York NYMEX sets the price of oil. Now [Saudi Arabia] is saying it will no longer let someone in New York with a bunch of paper set the price of oil."

Tucker claimed that the rules for world trade had been historically set by "big, powerhouse industrialized countries," such as the E.U. and the U.S. However, this is changing.

"Countries that produce actual raw materials are saying they want a seat at the table," he said.

The next tech breakthrough will involve this battle between centralized and decentralized tech - Jeppe Stokholm

Is any investment safe?

As geopolitical and macroeconomic factors become more volatile, Tucker suggested that diversifying investments is key.

"For the average working person, you have to spread yourself out a little bit," he said. "I've been a big fan of gold… You've got to have cash in the bank. I think you've got to have real estate… You just have to live your life so that if something happens, it's not going to chop off all your limbs."

However, Tucker did not forecast a system-wide "collapse."

"I do not actually bet on a system collapse," he said. "What I bet on is for people to slowly spend a higher and higher percentage of their money trying to keep up, while the value of their assets is going down."

To find out Tucker's gold price prediction, watch the video above.

Follow David Lin on Twitter: @davidlin_TV

Follow Kitco News on Twitter: @KitcoNewsNOW

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.