Russian central bank gold buying back with a vengeance

by Lawrence Williams
21-Apr (MineWeb) — Russia has announced a 1 million ounce increase in its gold reserves in March so is back on the gold buying trail in a big way.

According to a Russian central bank announcement on its latest gold reserve position it appears that it added 1 million ounces of gold (31.1 tonnes) to its holdings in March after a two month hiatus, bringing its total reserves to 39.8 million ounces (1,237.9 tonnes). There had been speculation that the nation had been cutting back on its gold purchases due to the economic difficulties it had appeared to face due to the falling oil price and western sanctions. However the lack of any increase in the early months of the year is a pattern we have seen before – but now the March rise is the highest seen since last September when the bank added 1.2 million ounces (37.3 tonnes) which itself was the largest monthly total in 16 years. The big March gold reserve rise could thus be a signal that the Russian central bank is strongly back on its gold buying spree.

…The news of the latest Russian gold reserve addition confirms the World Gold Council prediction that overall central bank gold reserve rises will continue at a strong rate this year – and there is also speculation by Bloomberg that China may also confirm a big rise in its reserve by as much as 2,500 tonnes or more in the months ahead as it jockeys to try and have the yuan accepted by the IMF as a part of the make-up of a revised Special Drawing Rights basket – although as we have pointed out here before this is something which could be vetoed by the US as not being in its interest given its 16.75% blocking voting interest in significant IMF decisions.

Russia’s central bank’s strong gold buying pattern in recent years – it bought around 150 tonnes last year and 77 tonnes in 2013, is being seen as a potential geopolitical weapon and a way of adding credibility to its currency position.

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