Since Russia, China, India, Brazil & South Africa are all either large producers or consumers of gold, or both, it is highly likely that the BRICS bloc they constitute could focus its cross-border gold trading network on trading physical gold, reports Bullionstar.com.
Gold pricing benchmarks from such a system would be based on physical gold transactions, which is a departure from the way the international gold price is currently established, according to the article.
Such a system would also be a threat to gold trading markets in London and New York. OTC and COMEX trade derivatives on gold, and are backed very little physical gold. Major BRICS gold producers, mainly Russia and China, could change the way the international gold prices are set currently.