Russia Should Overtake China’s Gold Holdings in January 2018

As we have reported on a number of occasions Russia has been moving ever closer to 6th position in global gold holdings and she is now within a handful of tons of physical gold to achieve the next step.

Russia added a recorded number of tons of gold to her gold holding in 2017 with 223 tons added to the central bank’s gold reserves. Please keep in mind that Russia has agreed to sell China between 80 and 100 tons of gold on an annual basis, so that would be in addition to what Russia added to her gold reserves. This means Russia has either been acquiring more than is being reported or she is mining more than is known about. It has long been accepted that Russia mined approximately 250 tons gold annually but these numbers seem to create an imbalance in the number of tons being mined or the number of tons being acquired on the open market.

Click Chart to Enlarge – chart – November 2017 – courtesy Statista

Russia again added to its gold reserves in December 2017, but only by a relatively small 300,000 ounces (9.33 tonnes) bringing its total to around 1,838 tonnes.  This latest reserve rise keeps the nation in sixth place among nationally reported gold reserve holders but now only around 4 tonnes behind fifth-placed China’s officially reported holding of 1,342.6 tonnes.  That brings the total Russian increase for 2017 to around 223 tonnes – its largest-ever annual rise, compared with 200 tonne rises in each of the two prior years. Source

We are reminded that countries are allowed, by IMF rules to double count their gold. If a nation “loans” or “swaps” their gold the nation holds the gold is allowed to keep it on their books as being present when it in fact is no longer in their possession. This sounds like sanctioned gold manipulation at the highest levels.

The Russian central bank has thus been the primary official buyer of gold over the past few years.  The only other significant central bank buyers in 2017, according to IMF figures, were Kazakhstan (37.6 tonnes up to November) and Turkey (149 tonnes up to October), but there were no significant national gold reserve offloaders during the year apart from Azerbaijan which appears to have reduced its gold reserves by 20 tonnes over January and February.  Others, like Venezuela may have been involved in gold swaps and gold loans which will have reduced available gold in their reserves, but the accounting rules enable them to keep showing unchanged reserve levels.  This could apply to a number of other countries too. Source

That’s a pretty neat trick. I will loan you $1 billion but report the $1 billion as being mine as well the $1 billion I have loaned you!! Oh to be a banker!

Russia has made their intentions clear that she wishes to move away from the Federal Reserve Note payment system and sees it as a threat to their national security. This is the number one reason for acquiring gold that will eventually rebalance their books with a much smaller holding of U.S. debt (bonds/treasuries).