Mazhar Muhammad Saleh, the financial advisor to the Prime Minister, revealed on Wednesday the reasons for the lack of gold in the state’s reserves compared to other hard currencies. Saleh said in an interview with Shafaq News Agency,   “Some countries still only hold quantities of gold as part of their cash reserves, as the greatest  focus today is on other assets that can be quickly and easily converted into productive assets that generate returns in the long term.”

He added,  “Countries are moving away from using gold as the main store of their cash reserves for several reasons related to

international economic developments and
changes in the nature of modern financial systems, which are restricted by the following main reasons, including
low returns compared to other assets such as:
investing in deposits, or
government bonds with a very high credit rating.”

“And it is risk-free, so gold does not achieve fixed returns like government bonds.” Saleh continued, Therefore,saying:

“the majority of countries prefer to keep assets that generate a fixed and stable income, such as: American or European treasury bonds that can truly generate annual interest, and the difficulty of

dealing with gold in times of crises is difficult, as
it is difficult to convert gold into liquidity quickly.” Compared to other financial assets such as foreign currencies and bonds. He explained that

“the changes in the global financial system since World War II have imposed conditions in which most countries have come to rely on the US dollar as a major reserve, given that

it is the most accepted and used global currency in international transactions, which makes

keeping the dollar or assets associated with it a more flexible option.”

The advisor to the Prime Minister pointed out that

“the cost of storing gold requires safe spaces to protect it from theft or damage, which may represent an additional burden compared to digital financial assets or liquidity.” He pointed out that

“countries are seeking to diversify their reserves to include different currencies and various financial assets to achieve greater stability, instead of relying solely on gold to avoid the cycle of gold assets and its problems.

Therefore, the standard rule is that gold should not exceed, on average, 10% of the total value of countries’ reserves.”

Iraq has a hard currency reserve of about 100 billion dollars, and 152 tons of gold in its reserves, which is equivalent to about 12 billion dollars.

Prime Minister’s Advisor Rules Out Oil Price Collapse: Trump’s Policy Will Not Sacrifice Petrodollar

The economic advisor to the Prime Minister, Mazhar Muhammad Salih, ruled out that the policy of US President-elect Donald Trump would “sacrifice” the petrodollar.

Saleh told Al Furat News Agency: “There are three restrictions that I find that prevent the deterioration of crude oil prices in the global market. The first is that the United States is still the largest oil producer in the world, and major American oil companies have invested in line with an oil price of no less than $70 per barrel, to cover the costs of producing shale oil at the break-even point.”

He added, “As for the second restriction, President Trump’s policy will not sacrifice the petrodollar to make the oil dollar a dollar supply that exceeds demand for it, at a time when the United States and its new foreign policy find themselves making the dollar the strongest currency in the world, within the framework of its dominance over the global economy.

Therefore, the new American administration is keen for the dollar to present itself again and for demand to exceed supply. Therefore, the weakness or deterioration of petrodollar revenues only means a weakening of the global oil currency and the basis of the dollar’s dominance.”

Saleh continued, “As for the third restriction, the deterioration of oil prices will allow China, the largest oil importer in the world, to obtain cheap energy resources, which is inconsistent with the economic competition between China and the United States in dominating the sources of growth and economic power in the world.”

He pointed out that, “In light of the above, I find that the three above-mentioned restrictions are what will prevent the collapse of the oil asset cycle if it is about to happen, taking into account not being overly optimistic, which requires fiscal and monetary policies within the framework of preventive policies that mitigate the impact of international factors on stability and economic growth in our country.”

Economic analysts have warned of a sharp 40% drop in oil prices next year if the OPEC+ group abandons current oil production restrictions.  

Oil Prices Stabilize After Hitting Their Lowest Levels This Month

Oil prices stabilized on Thursday, after hitting their lowest level this month, as the rise in the US dollar put pressure on commodities, while concerns about demand growth raised uncertainty about price expectations.

Brent crude was traded near $72 a barrel, while West Texas Intermediate crude exceeded $68.

China’s position in the global oil market declined this week, as the US Energy Information Administration said that India has now become the main source of demand growth in Asia, due to slowing Chinese consumption due to the economic slowdown and the increasing spread of electric cars.

More market analyses are expected to be issued on Thursday from the International Energy Agency.

IEA Raises Oil Demand Growth Forecast

 The International Energy Agency raised its forecast for global oil demand growth this year to 920,000 barrels per day from a previous forecast of 860,000 barrels per day.

It stated in its monthly report today that China is the main obstacle to the growth of global demand for oil, as Chinese demand shrank for the sixth consecutive month in September.

The agency kept its forecast for global oil demand growth in 2025 largely unchanged at 990,000 barrels per day, down from the previous forecast of one million barrels per day, according to Reuters.

She said that current balances indicate that even if OPEC Plus cuts continue, global supply will exceed demand by more than one million barrels per day in 2025.

The Organization of the Petroleum Exporting Countries (OPEC) has lowered its forecast for global oil demand growth in 2024 by 107,000 barrels per day to 1.8 million barrels per day, according to its monthly report issued two days ago.

The organization also reduced its expectations for growth in demand for OPEC+ oil by about 100,000 barrels to reach 0.5 million barrels per day in the same year.

Gold Continues To Decline In Baghdad Markets

The prices of “foreign and Iraqi” gold decreased in the local markets in the capital, Baghdad, today, Thursday.

Gold prices in the wholesale markets on Al-Nahr Street in Baghdad this morning recorded a selling price of one mithqal of 21 karat Gulf, Turkish and European gold of 532 thousand dinars, and a purchase price of 528 thousand dinars.

The selling price of one mithqal of 21-karat Iraqi gold was recorded at 502 thousand dinars, and the purchase price was 498 thousand.

As for gold prices in goldsmiths’ shops, the selling price of a mithqal of 21-karat Gulf gold ranges between 535,000 and 545,000 dinars, while the selling price of a mithqal of Iraqi gold ranges between 505,000 and 515,000 dinars.