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Russia’s Spring Gold Update: Central Bank Buys Another 550,000 Ounces

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Russia’s Spring Gold Update: Central Bank Buys Another 550,000 Ounces

(Kitco News) - Russia’s love affair with gold continues as the country’s central bank bought another 15.55 tonnes of gold in April.

The newly acquired gold brought Russia’s total reserves up by 0.72% to 2,183.46 tonnes, Russia’s central bank said in the latest press release.

Russia’s interest in gold has been on a steady increase with the central bank buying a total of 71.53 tonnes of gold during the first four months of the year.

At the same time, gold’s share of the central bank’s total reserves declined from 18.45% to 18.33%, according to the press release.

During the last decade, Russia’s gold reserves have gone from 2% to 19% as of the end of 2018 Q4, according to the World Gold Council’s data.

Some analysts suggested that the reason behind this increased interest in the yellow metal has been a trend to diversify away from the U.S. dollar.

“We are not the only ones actively buying gold,” Russian political scientist Andrey Suzdaltsev told Radio Sputnik, pointing to Iran and China. “This is an overall trend … [which] is connected to complaints targeting the world’s reserve currency - the dollar … It is natural that we would like to diversify.”

The World Gold Council (WGC) also pointed to an overarching trend towards gold, noting that central banks around the world purchased a total of 651.5 tonnes of gold last year — the largest amount since 1971.

“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.

In March, Russia purchased 18.7 tonnes of gold, which was preceded by the purchase of 37.3 tonnes in January and February.

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