Russia becomes World’s Fifth biggest Gold Holder
Russia becomes the world’s fifth largest official sector holder of gold as Western sanctions drove buying by its central bank to record highs in 2018. Officially, Russia has overtaken China to become the fifth biggest gold holder in a data revealed on Friday, 18th January 2019.
The central bank with support from President Vladimir Putin has been betting massively on bullion which is often seen as a safe haven and a better natural hedge against the dollar, with active purchases in the last 10 years.
It was recorded in 2018 that Russia’s buying toppled further as holdings of US Treasury securities were reduced immediately after Washington imposed sanctions on Russian entities in April, the toughest since Moscow’s 2014 annexation of Crimea from Ukraine.
On Friday, it was revealed that the central bank bought 8.8 million troy ounces in 2018 which beats the record, 7.2 million ounces set in 2017.
As of January 1, the data revealed shows that the central bank held 67.9 million ounces of gold, up from 59.1 million ounces at the start of 2018 which in the process made it the world’s fifth largest holder behind the US, Germany, France and Italy.
Russia's rise has relegated China to sixth place as it reported an increase in gold reserves just once in more than two years, with its holdings rising to 59.6 million ounces in December 2018 from 59.2 million ounces in October 2016.
Further inquiries from Industry sources revealed that some of the reasons Russia’s central bank was betting on gold due to US sanctions was because it could not be frozen or blacklisted.
A source at one Russian gold producer said “It seems that there is an aim to diversify from American assets,’’ referring to the central bank’s holdings.
Looking back to Putin's statement in May where he said "the monopoly of the US dollar is not reliable enough, it is dangerous for many.’’
Reports suggests that Russia’s central bank is buying gold that are domestically produced from commercial banks and the size of future purchases is a state secret. Russia's sudden rise is estimated to be about 14 per cent a year.
Although, it is not clear whether it will keep raising its gold holdings at the same pace, in 2019. However, a significant portion of Russia’s domestic gold production has already been bought by the central bank, which is also rising but at a slower pace as stated by industry sources.
Russia, the world’s third largest gold producer, increased its 2017 gold output by 6 per cent. According to the latest available data from Russia’s Finance Ministry, Russia produced 8.5 million ounces (265 tonnes) of gold between January and October 2018 and the producers 'lobby Gold Industrialists’ Union expects Russia’s 2018 production to rise by three per cent.
It was recorded in 2018 that Russia’s buying toppled further as holdings of US Treasury securities were reduced immediately after Washington imposed sanctions on Russian entities in April, the toughest since Moscow’s 2014 annexation of Crimea from Ukraine.
On Friday, it was revealed that the central bank bought 8.8 million troy ounces in 2018 which beats the record, 7.2 million ounces set in 2017.
As of January 1, the data revealed shows that the central bank held 67.9 million ounces of gold, up from 59.1 million ounces at the start of 2018 which in the process made it the world’s fifth largest holder behind the US, Germany, France and Italy.
Russia's rise has relegated China to sixth place as it reported an increase in gold reserves just once in more than two years, with its holdings rising to 59.6 million ounces in December 2018 from 59.2 million ounces in October 2016.
Further inquiries from Industry sources revealed that some of the reasons Russia’s central bank was betting on gold due to US sanctions was because it could not be frozen or blacklisted.
A source at one Russian gold producer said “It seems that there is an aim to diversify from American assets,’’ referring to the central bank’s holdings.
Looking back to Putin's statement in May where he said "the monopoly of the US dollar is not reliable enough, it is dangerous for many.’’
Reports suggests that Russia’s central bank is buying gold that are domestically produced from commercial banks and the size of future purchases is a state secret. Russia's sudden rise is estimated to be about 14 per cent a year.
Although, it is not clear whether it will keep raising its gold holdings at the same pace, in 2019. However, a significant portion of Russia’s domestic gold production has already been bought by the central bank, which is also rising but at a slower pace as stated by industry sources.
Russia, the world’s third largest gold producer, increased its 2017 gold output by 6 per cent. According to the latest available data from Russia’s Finance Ministry, Russia produced 8.5 million ounces (265 tonnes) of gold between January and October 2018 and the producers 'lobby Gold Industrialists’ Union expects Russia’s 2018 production to rise by three per cent.
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