Russia Is Now World's Largest Gold Buyer

The World’s Largest Gold Buyer Is Now Russia


By Alex Kimani 

For several years now, Russia’s central bank has been on a gold-buying spree, bulking up its already impressive stockpiles and setting off all manner of speculation.

And the buying frenzy appears to be going nowhere. According to the bank’s latest press release, the country bought another 597,000 ounces or 18.67 tonnes of gold in June, bringing its total reserves to 2,208 tonnes worth about $100.3 billion.

Russia purchased 200,000 ounces in January, one million ounces in February, 600,000 ounces in March, 550,000 ounces in April and 200,000 ounces in May thus bringing year-to-date purchases to more than 96 tonnes. Moscow’s appetite for the yellow metal appears insatiable. Gold now makes up 19 percent of the country’s foreign reserves compared to just two percent a decade ago.

Russia is now officially the world’s largest gold buyer.

Conspiracy theories

The World Gold Council (WGC) has reported an overarching trend towards gold, saying the world’s central banks purchased a total of 651.5 tonnes of the metal last year — the largest amount in 48 years. Global gold reserves increased eight percent in June, marking the highest monthly gain in three years.

As Juan Carlos Artigas WGC director of investment research told Kitco News in April: “What is more interesting to understand in the case of Russia … is not just these large numbers, but the trend. Emerging market central banks have been buying gold fairly consistently since 2010 … because central banks are looking to diversify their reserves, they are looking for safety and gold provides that to them.’’ But that has stopped the Rumorverse from spinning and conspiracy theories trying to decipher central banks’ love affair with gold emerging.

Adrian Ash, Director of Research at BullionVault says Putin’s heavy gold buying is bad for world peace: “Heavy gold-buying by governments or central banks is rarely a good sign for world peace and co-operation.”

Adrian though does have a valid point. Several anti-American nations including Russia have gone on a de-dollarization drive as they dump their dollar holdings and buy gold instead. Russia has also ramped up gold production and is now the world’s third-largest producer.

The country has announced plans to increase output by 50 percent over the next seven years and by 100 percent by 2030. Moscow bought nearly 100 percent of the country’s gold output last year.