Russia's Gold-Buying Spree Not Letting Up: Central Bank Buys Another 300K Ounces in July
(Kitco News) - After topping $100 billion in gold reserves in June, Russia purchased another 300,000 ounces or nine tons of gold in July, according to the latest data released by the Russian central bank.
The total amount of gold reserves rose 0.4% in the past month, reaching 71.3 million ounces or 2,218 tons as of August 1, compared to 71 million ounces or 2,208 tons as of July 1. The total value increased by 1.6%, rising to $101.9 billion, the central bank said.
At the time of writing, December Comex gold futures were trading at $1,512.60, down 0.20% on the day.
Gold now accounts for 19.6% of Russia's total reserves, the latest official figures revealed.
Russia bought a total of 3.4 million ounces or 106 tons of gold this year, adding substantial amounts each month. The country's central bank bought 600,000 ounces in June, 200,000 ounces in May, 550,000 ounces in April, 600,000 ounces in March, one million ounces in February, and 200,000 ounces in January.
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 (WGC) data.
The WGC has been pointing 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.
This year is no different from the last, with central banks, which have been heavy gold buyers, continuing to add the precious metal to their reserves.
Here's a look at top 10 countries with the largest #gold reserves by tonne ... See a drastic % change in #Russia and a massive drop in #Switzerland | @KitcoNewsNOW #kitconews #finance #preciousmetals #markets #economics #mining #investing | https://t.co/ufWmpoQ107 pic.twitter.com/1nMZ4QQFOC— Kitco NEWS (@KitcoNewsNOW) April 22, 2019
This trend is sending a message that is still going largely unnoticed by the market, Rhona O'Connell, head of market analysis for EMEA and Asia regions at INTL FCStone, told Kitco News on Tuesday.
"What is important here is that the amount of gold that the official sector has been absorbing is sending a pretty clear signal to the rest of the world about how it feels about stability or the lack thereof," O'Connell said.
Central banks like stability and the surge in the official sector's gold buying points to significant concerns being felt by countries like Russia and China when it comes to the stability of the global economy.
"It is partly an anti-dollarization move; it is partly picking up liquidity, partly looking at return," she said. "Gold is seen as the asset that holds things together. If you compare it with the majority of other classes, generally speaking, its correlation is low or negative. So if you are looking for portfolio stability, then gold is one of the key elements that deliver that."