Russia continues to buy gold: 18.7 tonnes in June

Russia has 18.7 tonnes of gold in its reserves in June added, according to the latest figures from the Russian central bank. This brings the total size of the gold reserve to a new record of 1,499 tonnes. Converted to the current gold price, that represents a value of $63.5 billion. Compared to a month earlier, the value of gold rose by more than $5.5 billion, partly due to the higher Gold price and partly as a result of the purchase of 18.7 tonnes in the past month.

Like China, Russia also wants to hold a larger part of its reserves in gold. Since the outbreak of the financial crisis in 2008, the country has added about a thousand tons to its reserves, and the value has risen from $15 billion to more than $63 billion. Whereas in 2008 the precious metal represented only 2.5% of total reserves, now it is more than 16%.

Russia adds 18.7 tonnes of gold to reserves

The central bank of Russia holds 16% of its reserves in precious metals

Gold stock Russia

The central bank of Russia completely changed its monetary policy in favor of gold in 2006. As of that year, the precious metal was no longer valued at a historically fixed rate of $300 per troy ounce, but at the much higher market value. In doing so, Russia has also abandoned the last link between gold and the currency, just as Europe did with the introduction of the single currency. Also, in 2006, the central bank started buying gold again, a rate that the central bank has maintained to this day.

In the first half of this year, Russia added more than 83.5 tonnes of the yellow metal to its reserves. This is relatively less than in 2015, when the central bank withdrew a record amount of 206 tonnes of gold from the market. It is likely that a large part of the precious metal comes from domestic mines, as Russia is one of the five countries in the world with the largest gold mining sector.

According to the central bank, the precious metal is an important part of the total reserves, as it offers a 100% guarantee against political risks. Gold has no counterparty risk, unlike government bonds.

Overview of Russia's Central Bank's Total Reserves

Russia adds 18.7 tonnes of gold to reserves