– Gold and FX reserves are “additional financial cushion” for state in face of “external uncertainties”

– Russia bought another 77 tonnes of gold in Q3

– Ruble volatility does not create risks for financial stability in Russia

– Russia intends building fx and gold reserves to $500 billion in coming years

– Gold is a “100% guarantee from legal and political risks”

Russian central bank governor, Elvira Nabiullina spoke about Russia’s gold and foreign currency reserves today saying Russia intended building them up to $500 billion in the coming years. More importantly, she confirmed that Russia continues to see gold reserves as an important monetary  asset – in her words as a “financial cushion.”

GoldCore: Russian Central Bank Gold Reserves

According to Russian news agency TASS, Nabiullina said: “Regarding gold and foreign currency reserves, we have the desired benchmark of $500 billion, and not in the three-year term, it could be 5-7 years and more.”

Reuters reported that Russia does not have a target for the volume of gold in its reserves: “Nabiullina also said the regulator did not have a set target for the volume of gold in its reserves.”

Russia like other central banks, sees gold reserves as a form of monetary hedging and financial insurance: “We believe it is necessary in terms of creating additional financial cushion for the state in the face of such external uncertainties,” Nabiullina said.

Russia and China have been the leading official sector gold buyers over the last 15 years. Russian central bank officials have previously said that Russia views gold bullion as “100% guarantee from legal and political risks”.

Russia is now the seventh biggest holder of gold reserves after the U.S, Germany, the IMF, Italy and France and the rising gold power China. Russia has more than tripled its reserves since 2005 and holds the most gold bars since at least 1993, IMF data shows.

Gold remains a large part of many central banks’ reserves, despite stopping backing paper and the electronic currency with gold in 1971.

Nations globally have been increasing their gold holdings in recent years, a reversal from two decades of selling. China, Kazakhstan, Ukraine and Belarus are among other nations that have been accumulating gold.

GoldCore: Silk Road Gold Demand

Russia has been steadily buying bullion since 2007 and the advent of the global financial crisis. Russia was accumulating gold even prior to tensions with the West and international sanctions over the Ukrainian conflict.

In the event of relations further deteriorating with the U.S., UK and certain EU countries, we would expect Russia to intensify their selling of dollar reserves and accumulation of gold which would be very supportive of gold prices. Indeed, w