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Russia's 2019 Gold Shopping Spree: Another 600,000 Ounces Added In March

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Russia’s 2019 Gold Shopping Spree: Another 600,000 Ounces Added In March

(Kitco News) - The latest figures from the Russian central bank revealed that Russia’s interest in purchasing more gold is not subsiding.

The country’s central bank added another 18.7 tonnes of gold to its reserves, raising the total figure by 0.89%, according to a press release published on Friday.

This increased Russia’s total gold reserves to 69,700,000 ounces or 2,167.9 tonnes, the central bank stated. Gold represents around 18% of the central bank’s total reserves.

During the first quarter of 2019, Russia acquired 56 tonnes of the precious metal, buying 37.3 tonnes of that in January and February.

During the last decade, Russia’s gold reserves have been steadily climbing, with acceleration in pace beginning in 2014, according to the World Gold Council’s data.

Analysts have suggested that one of the main reasons for increased gold purchases has been the goal to diversify away from the U.S. dollar.

“What is more interesting to understand in the case of Russia … is not just these large numbers, but the trend. Emerging market central banks have been buying gold fairly consistently since 2010 .. because central banks are looking to diversify their reserves, they are looking for safety and gold provides that to them,” World Gold Council director of investment research Juan Carlos Artigas told Kitco News at the beginning of April

Russia’s share of U.S. dollars in its reserves fell from 46% to 22% last year, noted analysts at the Bank of America Merrill Lynch.

Russia’s trend is part of a bigger move by central banks around the world to buy more gold, with a total of 651.5 tonnes of gold purchased globally by central banks last year — the largest amount since 1971.

This kind of continuous interest in gold is a long-term positive for gold prices, noted TD Securities in a report published in January.

“Investors are being led by central banks,” said Bark Melek, head of commodity strategy at TD Securities. “Overall, given that gold currently makes up roughly 10% of total global reserves, there is lots of room to grow in order to reach levels prior to the big central bank sales.”

June Comex gold futures were last trading at $1,277.50, up 0.12% on the day, following a major sell-off during the last two weeks, which saw prices touch four-month lows.

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