The central bank of Russia added 37.3 tons of gold to its reserves in November. With this purchase the total gold stock of the country rose to more than 2,100 tonnes, accounting for a fifth place in the ranking of countries with the largest gold reserves. Since the beginning of the year the central bank has added a record amount of more than 260 tonnes.
The fact that Russia has been buying a lot of gold in recent years is well known, but the pace at which they are expanding their stock seems to be increasing lately. The central bank sees the gold stock as a form of protection against political risk, because this form of reserve is not vulnerable to sanctions. Since 2014, Russia has increased its gold purchases, coincidentally the same year in which the first Western sanctions were imposed.
Russia is expanding it’s gold reserves
In the past ten years Russia has quadrupled its gold holdings from 510 to 2,100 tonnes. Thanks to the rising gold price, the value of it’s gold stock has increased even more, from just $12.6 billion in 2008 to more than $80 billion now. Gold also gained a more prominent role as a percentage of total reserves. Ten years ago the precious metal represented only 2.6% of all reserves of Russia, at the end of 2018 the allocation to gold was close to 18%.
In recent years, several central banks have added gold to their reserves. Poland bought some precious metal for the first time in a long time, while Hungary increased its stock tenfold. Several European countries have also repatriated some of their gold holdings from abroad, including the Netherlands, Germany and Austria. The precious metal is seen as a strategic reserve in times of economical and political uncertainty.
Russia added 37,3 tonnes of gold to it’s reserves
Allocation to precious metals has increased substantially over the past decade
Russia will buy a record amount of gold this year
Source: Holland Gold