Russia bought 300,000 troy ounces of gold in June

The central bank of Russia added gold to its reserves again in Juneadded. With the purchase of 300,000 troy ounces (9.33 tonnes), the country expands its total gold reserves to almost 1,717 tonnes, good for sixth place in the ranking of countries with the largest gold reserves. Since the beginning of this year, Russia has already added more than a hundred tons of the precious metal to its reserves.

Russia remains Buy gold as a form of diversification and as a hedge against political risk. The precious metal has no counterparty risk and can be traded outside the financial system. This distinguishes it from foreign exchange reserves such as shares and bonds, which are traded through banks and brokers. Access to foreign exchange reserves can be hampered by sanctions, while a gold reserve at home can be used under any circumstances.

Gold stock Russia rises to 1,717 tonnes

Annual gold purchases Russia since 2006

Russia adds gold and dollars to reserves

The total gold reserves of Russia stand for $68.77 billion on the central bank's balance sheet. Thus, of the total reserve of $412 billion , about 17% consists of precious metals, valued at a Gold price of about $1,246 per troy ounce. The remaining reserves are denominated in foreign currency and consist mainly of US dollars and euros.

According to the latest figures from the U.S. Treasury Department, Russia has added not only gold, but also U.S. Treasuries to its reserves this year.added Since the beginning of this year, the total position in so-called Treasuries has risen from $86.1 billion to $108.7 billion, the highest level since September 2014.

Gold and foreign exchange reserves Russia

Gold as a strategic reserve

Gold is seen as a strategic asset and for that reason emerging economies such as Russia and China are currently trying to accumulate as much gold as possible. In Russia, the production of gold mines is largely bought up by domestic banks, which then sell part of it on to the central bank. In China , too, almost the entire production of the precious metal remains domestic, where the demand for gold is so high that almost a thousand tons of gold are imported from abroad every year.

Since the outbreak of the financial crisis in 2008, the gold reserves of Russia and China have more than tripled. Compared to Europe and the United States, these emerging economies still have relatively little gold in their vaults. This backlog is quickly being made up, as the following graph shows.

Gold stocks Russia and China are growing rapidly (Chart via the World Gold Council)