Russia continues to hoard gold: 21.7 tonnes added in May

 Russia added 21.77 tonnes of gold to its reserves in May, according to the Latest figures of the central bank. With this purchase, the country expands its total gold reserves to 1,708 tonnes, good for sixth place in the ranking of countries with the largest public gold reserves. 

Since the beginning of this year, Russia has already added 93.3 tonnes to its reserves, making it once again the largest buyer of the precious metal. The central bank buys a significant portion of domestic gold mining production, as the precious metal is seen as a strategic reserve.

The central bank of Russia has been adding gold to its reserves on a structural basis since 2006, but due to the escalation in Ukraine and the Western sanctions that followed, gold purchases have accelerated in recent years. 

The precious metal has no counterparty risk and is therefore extra interesting as a form of diversification in uncertain times. It cannot be blocked by foreign influences and will be accepted by almost all countries in the world as a form of payment.

Russia adds 21.7 tonnes of precious metal to reserves

Russia continues to buy gold continuously

Russia keeps buying gold

The gold in the vault of the Russian central bank has been converted to the current Gold price a value of $69.3 billion. Relative to the total reserves of $405 billion, that's a weighting of more than 17%. That's much more than a decade ago, when less than 2.4% of total reserves were precious metals. Ten years ago, the country had just over 400 tonnes of gold, now it is almost four times as much.

As the graph below shows, Russia has had to draw on its foreign exchange reserves twice since President Putin took office in 1999. The first time was during the 2008 financial crisis and the second time was in 2014, due to the falling oil price. As a result, revenues came under pressure and the value of the ruble began to fall. To cushion that blow, the country had to draw on part of its strategic reserve. It is striking that in both situations Russia exclusively mobilised its foreign exchange reserves , while continuing to buy precious metals .

Russia added foreign exchange reserves in addition to gold