Russia further expands gold purchases

Russia has increased its gold purchases a little further in recent months, according to the latest Figures of the central bank. After purchasing almost 25 tonnes of gold in the month of July, the central bank added 31.1 tonnes and 37.32 tonnes respectively to its reserves in the months of August and September.

Since the beginning of this year, the country has already bought almost 200 tonnes of gold, similar to the average of the past four years. With three months to go, last year's record of 224 tonnes is even within reach.

With the latest purchases, Russia further expands its gold holdings to 2,037.29 metric tons, which converts to the Gold price represents a total value of $77.5 billion. That is a few billion less than at the beginning of this year, because the price of the precious metal was higher then.

The central bank of Russia values its gold reserves at the market value of the precious metal every month, unlike the U.S. central bank which still values gold stocks at a historical rate of $42.22 per troy ounce.

Russia expands gold supply

Over the past decade, the central bank of Russia has quadrupled its gold holdings, from just under 500 metric tons in September 2008 to more than 2,000 metric tons at the time of writing. Whereas in 2008 the central bank's total reserve consisted of 2.25% precious metals, now it is about 17%.

It is striking that the central bank has increased the pace of gold purchases in recent years, while reducing its dollar reserves in the form of US government bonds. In August, the central bank had only $14 billion in so-called "Treasuries" on its balance sheet, up from $100 billion last year.

The Russian central bank sees the gold stock as a form of protection against political risk, because the precious metal has no counterparty risk and cannot be affected by economic sanctions. After all, gold can be mobilized under any circumstances to import goods from abroad. Since the financial crisis in 2008, central banks have been adding gold to their reserves, especially those of emerging economies.

Total reserves of the Russian central bank

Gold supply Russia continues to increase

This year, the country has already bought almost 200 tonnes of gold

This contribution was made from Geotrendlines