The recent gold purchase by El Salvador, described by some as a pivot, shows President Bukele and his administration’s commitment to the ethos of bitcoin and sound money.

Last week, the Central Bank of El Salvador announced the acquisition of $50 million worth of gold, using the commodity to diversify its foreign reserves. The move, the first of its kind since 1990, aligns with Bukele’s appreciation of bitcoin’s monetary ethos, since gold has long been a traditional haven against fiat‑currency devaluation.

The timing of this purchase is also relevant, as the transaction happens when the precious metal is close to its all-time high prices.

Gold offers several advantages over bitcoin when dealing with international institutions such as the International Monetary Fund (IMF), to which the country is bound under a $1.4 billion credit facility agreed in February.

As a result of this deal, the Salvadoran government agreed to confine its bitcoin purchases, and according to the IMF, it has complied with this condition, even when Bukele claims otherwise.

Gold would offer El Salvador a way to protect against fiat‑currency volatility without relying solely on bitcoin, given the global trend of central banks selling debt securities and increasing gold holdings.

Pivoting to gold would be a step in the right direction and would comply with IMF constraints on bitcoin purchases. Bitcoin is often called “digital gold,” and in its absence, gold can provide many of the same properties.

Read more: Bitcoin Purchases Confined: IMF Approves $1.4 Billion Credit Facility for El Salvador

Read more: El Salvador Pivots to Gold, Acquires 13,999 Troy Ounces for Diversification

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