Russia buying 100 tons every yearRussia’s central bank will increase gold reserves by over 100 tons every year
The
Gold reserves of the
Russiancentral bank grew by 280 tons over the last 2 years. And the bank willcontinue with a similar speed by buying at least 100 tons every year,deputy chairman Georgy Luntovsky told reporters now.
Another high ranking official, the first Deputy chairman of the bank,Alexei Ulyukayev, told the Prime Tass economic news agency, that thediversification of the currency reserves will lead to an increased shareof gold.
Although Russiais not importing gold to meet these goals, as President Vladimir Putinimplied in earlier comments, it will none the less impact world markets.Russia is one of the world’s largest gold producers, but the centralbank is purchasing a significant part of the total domestic output.
Russia’s central bank purchases are the largest worldwide and lead toa paradigm shift on global gold markets. For the first time sincenearly three decades of central banks selling their reserves anddepressing gold prices, they became net-buyers of the eternal metal, andthe trend is increasing as many emerging markets have a lot to catch upto diversify their often gigantic currency reserves. Of a total of $6trillion in reserves, these countries hold only 2 percent in preciousmetals.
As Francisco Blanch, head of global commodity research at
Bank of AmericaMerrill Lynch, said at a recent conference in
New York hosted by ETF Securities Ltd.,
this trend will underpin the price of gold for the next several years.
The significance of this shift can be seen in the numbers which theRussian central bank released: According to the data, the amount of goldin the Russian international reserve assets increased by 152.4 tonnes,or 23.9 percent, in 2010 to reach 25.4 million net troy ounces (790tonnes) as of January 1, 2011.
This represents a steep rise from January 1, 2009, when the amount ofmonetary gold in Russia's international reserves was still at 16.4million ounces (510.1 tonnes).
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