- Russia adds another 700,000 ounces (22 tonnes) to gold reserves
in November
- Russian ally Kazakhstan increased gold reserves for 38th month – 7
Mil ounces
- Russia has added 197.1 tonnes in 2015 – Compared with 172 tonnes in
all 2014
- November gold buying is Russia’s ninth straight month of increase
- Russia now has sixth largest gold reserves in the world
- Central bank buys all Russian gold production
- Other Russian gold demand imported
- Russia views gold bullion as “100% guarantee from legal and
political risks”
Russia continues to add to its gold reserves and added another 700,000
ounces in November or another 22 metric tonnes, and analysts believe this
buying will continue and may intensify in the coming months.
Russian ally Kazakhstan increased its gold reserves for a 38th month to
7.03 million ounces in November from 6.96 million ounces a month earlier.
The latest large increase in Russia’s gold reserves – a “buying spree” as
reported on Reuters
Africa has again gone largely unnoticed by most analysts. Indeed, the
important monetary and geopolitical ramifications continue to be largely
ignored in western media.
Russia’s total gold reserves have now increased to 44.8 million ounces or
around 1,392.8 metric tonnes, with a current value of just $48.3 billion.
Russia’s total FX reserves are $371.2 billion and their gold allocation
remains just 13% of their total reserves.
The share of gold in Russian foreign exchange reserves is much lower than
in many other countries such as the U.S., Italy and France. Russian
diversification into gold is likely to continue and could intensify if
relations with the U.S. and NATO powers further deteriorate.
Russia still have less than a fifth of the gold reserves of the U.S. which
are believed to be over 8,400 metric tonnes of gold. However, the U.S. has no
foreign exchange reserves and is the largest debtor in the world – indeed it
is one of the largest debtors the world has ever seen.
Russia now has the sixth highest gold reserves in the world – behind the
U.S., Germany, Italy, France and China.
In 2014, Russia bought more gold in than in any year since the break-up of
the Soviet Union. The country acquired over 173 metric tonnes according to
World Gold Council figures. Reserve diversification intensified after April —
averaging about 20 tonnes per month.
Russia gold buying has intensified in 2015 and now stands at 197 metric
tonnes year to date.
Much of the gold bought likely came from Russian gold production which is
currently at about 25 metric tonnes per month. In 2014, Russia was the third
largest gold miner in the world at 266.2 tonnes, just six tonnes short of
Australia in second place and China in first place.
Thus, the Russian central bank is generally consuming all of Russian gold
production and sometimes having to import gold. Therefore, all domestic
demand for gold and Russia is an increasingly wealthy nation with thousands
of millionaires and hundreds of billionaires including mega rich oligarchs.
If any of these oligarchs decide to begin accumulating gold, then the
already delicate supply balance in the physical gold market will be impacted
resulting in much higher prices. It is worth noting that some of these
oligarchs remain close to Putin and the Kremlin and thus this could be a
coordinated strategy.
Clearly, Russia puts great strategic importance on its gold reserves. Both
President Putin and Prime Minister Medvedev have been photographed on
numerous occasions holding gold bars and coins as a display of economic
stability and strength and the central bank declared in May 2015
that Russia views gold
bullion as “100% guarantee from legal and political risks.”
Prudent investors are following Russia’s lead by diversifying and having
an allocation to physical gold coins and bars.
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DAILY PRICES
Today’s LBMA Gold Prices: USD 1077.00, EUR 985.09 and GBP 723.18 per ounce.
Yesterday’s LBMA Gold Prices: USD 1071.15, EUR 987.10 and GBP 719.47
per ounce.
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