Russia Gold Rush Sees Record Reserves For Putin Era

by Yuliya Fedorinova of Bloomberg via Irish Independent

Vladimir Putinis doing his part to keep the upswing in gold alive.

Since the Russian president went on a geopolitical offensive in Ukraine in 2014, thehaven assethad itsfirst annual gain in four years in 2016 and is on track for another in 2017.

Click to enlarge. Russia added another 500,000 ounces of gold to it’s reserves in August. Source: Goldchartsrus.com

A beneficiary ofeconomic and political perils from North Korea to Brexit, it’s among the top-performing commodities this year.

Meanwhile, theBank of Russia has more than doubled the pace of gold purchases, bringing the share of bullion in its international reserves to the highest of Mr Putin’s 17 years in power, according to World Gold Council data.

In the second quarter alone, itaccounted for 38pc of all gold purchased by central banks.

The gold rush is allowing the Bank of Russia to continue growing its reserves while abstaining from purchases of foreign currency for more than two years.

But what may matter most is thatgold is as geopolitics-proof an investment as any in the age of sanctions and a deepening rift with the US.

Gold is an asset that is independent of any government and, in effect, given what is usually held in reserves, any Western government,said Matthew Turner, metals analyst at Macquarie Group in London.This might appeal given Russia has faced financial sanctions.

Besides being the largest official buyer of gold,Russia is also among the world’s three biggest producers, with the central bank purchasing from domestic miners through commercial banks and not in the open market.

Since starting to accelerate bullion purchases in 2007,Russia’s holdings have more than quadrupled to 1,556 tonnesat the end of June, just behind China and more than Turkey, India and Mexico combined,bringing its share in Russia’s $427bn (361bn) reserves to near17percent.

If buying continues at a similar pace, the World Gold Council said thefull-year increase in 2017 could closely match 2015 and 2016.

Source:Irish Independent

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