Central Bank of Russia Moves into Fifth Place Among Gold Holding Nations.
The Central Bank of Russia’s gold appetite shows no sign of abating. After adding a record 224 tons of gold to reserves in 2017, the Central Bank of Russia added another 600,000 ounces (approximately 18.66 tons) of gold to reserves in January. The latest gold addition grew Russia’s gold reserves to 1857 tons and past the People’s Bank of China’ 1842 tons. As a result of January’s addition, Russia now occupies fifth place among gold holding nations.
The Russian Central Bank announced this week that its gold reserves had reached 59.1 million troy ounces (approximately 1857 metric tons) after giving effect to the additional 600,000 ounces/18.66 tons of gold added in January.
Over the past few years, Russia has led the world in adding gold to her central bank reserves, ahead of the People’s Bank of China (PBOC), the central bank that has added the second largest of amount of gold. While Russia has consistently added gold to reserves, in recent years, the PBOC has not reported adding any since October 2016.
As a result of Russia’s gold acquisitions, she occupies fifth place among gold holding nations ahead of sixth placed China and behind fourth placed France.
Gold Reserves By Country
The Central Bank of Russia added a record 208 tons of gold to reserves in 2015. In 2016, Russia added 199 tons of gold to her reserves. In 2017, Russia added a record 214 tons of gold to reserves.
In addition to increasing its gold hoard, Russia’s overall foreign reserves have grown from $371 billion in January 2016 to $447 billion as at January 2017, a 20% increase.
As of January 31 2017, gold constituted about 18% of the Central Bank of Russia’s $447 billion reserves with her gold hoard valued at approximately $80.4 billion, up from $52 billion or 12% of overall reserves as at August 31, 2016.
Russian Gold Reserves June 2015 – January 2018
U.S. Treasuries as Part of Russia’s Foreign Reserves
In January 2014, Russia’s U.S. Treasury position was $131 billion. In reaction to U.S. inspired sanctions being placed on her, Russia sold a substantial portion of her U.S. Treasury holdings. Russian U.S. Treasury holdings reached a low of $66.5 billion in April 2015. Since then Russia has added back a large portion of its U.S. Treasury holdings. As of December 2017, Russia held $102.2 billion in U.S. Treasury Securities.
Where Does Russia Get All That Gold?
Russian gold mining produces the second largest annual output in the world behind China. Russia adds a substantial percentage of its domestic mining production to her reserves. By retaining a large percentage of its gold mining output the Central Bank of Russia has been in effect converting Roubles into gold.
This article by BGASC is not, and should not be regarded as, investment advice or as a recommendation regarding any particular course of action.