Russia and China want trading platform for gold

The central banks of Russia and China jointly want a trading platform create to optimize the gold trade between the two countries. Both China and Russia play an important role in the global gold market, not only because the central banks of these countries buy by far the most gold, but also because both countries have huge gold mining sectors.

"In China, the gold trade is concentrated in Shanghai, in Russia it is done in Moscow. Our proposal is to create a link between these trading centers, so that more transactions can take place between these two markets."Sergey Shvetsov, Deputy Governor of the Russian Central Bank, told the news agency TASS.

China and Russia go for gold

China's gold mining sector produced last year 450 tons of gold, while Russian gold mines accounted for a production of about 295 tonnes last year. This makes these two countries account for a quarter of global gold mining.

The Russia and China are also important markets for the precious metal, if only because the central banks of both countries buy so much gold. Russia joined in 2015 more than 200 tons of gold to its reserves, while the People's Bank of China added more than a hundred tons of the yellow metal to its reserves in six months. Both countries are expected to continue this trend this year.

The big question is what both countries want to use such a trading platform for. Is it solely intended to serve the private gold market? Or do Russia want to use such a trading platform to make the precious metal easier to trade between central banks?

Central Banks Expand Gold Reserves

According to the latest figures, China's central bank has an official gold reserve of almost 1,800 tonnes, while Russia more than 1,442 tonnes of the yellow metal in the safe. Last year, global central banks added net 483 tonnes to their reserves in order to diversify their reserves.

Central banks Russia and China want trading platform for gold