Russia adds 40 tonnes of gold in reserves

Russia added more than 40 tonnes of gold to its reserves in October, according to Figures of the central bank. Since the country began in 2006 with Buy gold she has never before bought so much precious metal in one month as she did in the past month. With the purchase of 1.3 million troy ounces (40.43 tonnes), the country's total gold reserves grew to 1,583.17 tonnes. At a valuation of $1,265 per troy ounce, Russia's gold holdings account for a market value of $64.43 billion.

Over the past ten years, Russia has been able to expand its gold reserves from less than 400 tonnes to almost 1,600 tonnes. Whereas in 2006 the precious metal represented less than 4% of total reserves, today it is about 16.5%. The shift of foreign exchange reserves towards gold began as early as 2006, but only accelerated after the outbreak of the financial crisis in 2008 and after the oil price crash in 2014.

Gold stocks Russia quadrupled in ten years (click for larger image)

Gold and foreign exchange reserves Russia since 1999 (click for larger image)

From foreign exchange reserves to gold

Russia wants to become less dependent on dollar reserves and has therefore been structurally adding precious metal to its reserves for years. Last year, Dmitry Tulin of the Russian central bank stated that while gold has a price risk, only gold has a One hundred percent guarantee legal and political risks. This may explain why Russia has been converting its foreign exchange reserves into gold at an accelerated pace since 2014.

In the first ten months of this year, the country added 167.73 tonnes of precious metal to the vault. If we extrapolate this trend to the whole year, we arrive at just over 200 tonnes of gold. That's almost as much as the record of 206 tonnes of gold in 2015.

Annual gold purchases Russia since 2006 (click for larger image)

Central banks buy gold

Of all the central banks, Russia is the most active in expanding its gold reserves. Russia ranks sixth globally among countries with the Largest gold reserves, behind the United States, Germany, Italy, France and China. Other countries that have accumulated a relatively large amount of gold in recent years are China and Kazakhstan.

In 2010, central banks were net buyers of gold again for the first time since 1988. According to the Official Monetary and Financial Institutions Forum (OMFIF) gold will make a comeback as a monetary reserve.