The Russian Central Bank announced last week that its gold reserves had reached 56.1 million troy ounces (approximately 1,745 metric tons). The total included an additional 500,000 ounces (approximately 15.5 metric tons) of gold added in August.
Year to date, the Russian Central Bank has added over 4.2 million ounces or approximately 131 tons of gold to reserves. Over the past two years, Russia has led the world in adding gold to her central bank reserves, ahead of the People’s Bank of China, the central bank that has added the second largest of amount of gold.
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 addition to increasing its gold hoard, Russia’s overall foreign reserves have grown from $371 billion in January 2016 to $424 billion as at August 31, 2017.
The current pace of Russia’s gold purchases in 2017, puts it on track to add more than 200 tons of gold. Through August 2017, the Russian Central Bank has added 4.2 million ounces of gold to reserves compared to 3.6 million ounces of gold added through the the same time periods of 2015 and 2016.
As of August 31 2017, gold constituted about 17.3% of the Central Bank of Russia’s $424 billion reserves with her gold hoard valued at approximately $73.5 billion, up from $52 billion or 12% of overall reserves as at August 31, 2016.
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 a large portion of its U.S. Treasury holdings. As of July 2017, Russia held $103.2 billion in U.S. Treasury Securities.
As a result of Russia’s gold buying binge, Russia has vaulted into the top ten gold holding nations and is now the sixth largest.
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.