Russia Has Begun Selling Its Gold, According To SocGen

Tyler Durden's picture




 

A few days ago, we first reported a rumor that was floating around Wall Street desks, and which, according to some, was the "reason" that gold was being kept lower even as sovereign risk was exploding around the globe. The rumor was that Russia was selling its gold holdings:

This led to Bloomberg speculating, and us rhetorically asking, if "Putin's next step will be to sell gold"

"Russia is at a critical juncture and given the sanctions placed upon them and the rapid decline in oil prices, they may be forced to dip into their gold reserves, if it happens it will push gold lower." That is what, according to some people Bloomberg has quoted, is in the cards.

 

While some suggest the accumulation was "tradition" it is still nonetheless an impressive aggregation of the barbarous relic:

 

 

So given the efforts to build this gold-backing for their nation's currency, do we really expect Putin to now dump his physical: or perhaps more strategically suggest a true gold-backed currency and jawbone the currency that way?

So what is the truth? Well, we won't for sure until the next official report by the Central Bank of Russia hits the IMF database,  but in the menatime, SocGen just reported that the selling may have started:

 

Looking at the correlation between gold and oil prices, the chart above illustrates that both commodities were moving closely in tandem over the July to September period. However, this link was broken in early October when gold embarked upon the new rally on weaker US dollar and some physical support, while oil prices continued to slide. The rally, nonetheless, proved to be short lived, as gold returned to its downtrend after hitting the $1,250 level on 21 October, and continued to move down, along with oil, for the remainder of the month.

 

Starting from November we have seen gold and oil prices moving in opposite directions again. As we mentioned earlier, oil prices came under significant pressure on concerns about a growing global oil supply glut. On the contrary, gold recovered some of its earlier losses, supported by fresh buying interest in India on the news that the Reserve Bank of India (RBI) was reviewing gold import restrictions that were introduced last year. Towards the end of November, the RBI surprised the markets by announcing the withdrawal of the 80:20 rule, which saw gold imports surging to 150 tonnes that month, according to the latest statistics from the Indian Ministry of Commerce and Industry. In addition, worries over the potential impact of stronger US dollar on the global economy spurred some safe-haven buying. 

 

...

 

It is not surprising that Russia has been tackling its financial problems by selling the gold they have been accumulating. According to the IMF data this year, one of the world's largest oil exporters acquired 115 tonnes in the January to September period, and added another 18.9 tonnes to their reserves in October. Russia has been purchasing the yellow metal at a faster pace this year, taking advantage of lower gold prices and, perhaps, preparing for the possibility of a long-lasting restrained relationship with the West and economic downturn. It appears possible that the Central Bank of Russia has started to sell off some of its gold reserves in December, with some sources reporting that official gold reserves dropped by $4.3 billion in the first week of the month.

Of course, it should be noted that SocGen and its "sources" have a conflict: in an indirect way, none other than SocGen is suddenly very interested in Russia stabilizing its economy because as we wrote before, "Russia Contagion Spreads To European Banks : French SocGen, Austrian Raiffeisen Plummet" which also sent SocGen's default risk higher in recent days. So if all it will take to stabilize the RUB sell off, reduce fears of Russian contagion, and halt the selloff of SocGen stocks is a "source" reporting what may or may not be the case, so be it. 

In any event, keep a close eye on the next update of Russian official gold holdings: it may well be the next big story of where gold is headed and, if true, an even more important question will be who is Russia selling its gold to.

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Thu, 12/18/2014 - 14:08 | 5569016 Fukushima Sam
Fukushima Sam's picture

Bad idea.

Thu, 12/18/2014 - 14:08 | 5569023 taraxias
taraxias's picture

"It appears possible"

LOL !!!!!

Thu, 12/18/2014 - 14:11 | 5569037 Pinto Currency
Pinto Currency's picture

 

 

SocGen is short gold according to Russia.

Thu, 12/18/2014 - 14:15 | 5569046 kliguy38
kliguy38's picture

Bullshit story.....all noise Putin knows what's comin' ......

Thu, 12/18/2014 - 14:22 | 5569069 Pinto Currency
Pinto Currency's picture

 

 

http://www.gold-eagle.com/article/grandmaster-putins-golden-trap

 

These gold lease rates indicate that it may be possible SocGen is full of it:

http://www.kitco.com/charts/popup/au0182lr.html

Thu, 12/18/2014 - 14:26 | 5569137 THX 1178
THX 1178's picture

I thought Russia would pull the plug before it parted with the Au. Oh well. Maybe the rumos are untrue.

Thu, 12/18/2014 - 14:30 | 5569155 Ahoy Polloi
Ahoy Polloi's picture

In similar news, I'm proud to report that I got a blowjob from Christy Turlington last night...

Thu, 12/18/2014 - 14:32 | 5569172 jaap
jaap's picture

Very interesting to listen to Paul Craig Roberts today. Telling it all:


http://usawatchdog.com/is-ruble-collapse-act-of-war-paul-craig-roberts/

Thu, 12/18/2014 - 14:36 | 5569204 James_Cole
James_Cole's picture

In any event, keep a close eye on the next update of Russian official gold holdings: it may well be the next big story of where gold is headed and, if true, an even more important question will be who is Russia selling its gold to.

Now this some funny shit. One of zhs favourite absurd theories comes crashing down...but don't worry! Who's Russia selling to? China?? Soon china will swap to gold standard and USD will be worth nothing!! Sure, that would crater their economy.. but um..who's china selling to???

In other news, Stox currently in freefall on the back of low oil price!! It's all overrr

Thu, 12/18/2014 - 14:39 | 5569222 aPlayer
aPlayer's picture

Can't understand. Why would they sell the Gold if they can unload part of their $200 billion held in US treasuries? Something is not right here. Or they cannot sell the US treasuries?

Thu, 12/18/2014 - 14:48 | 5569274 BaBaBouy
BaBaBouy's picture

Folks, We Are BullShitting You ...

Thu, 12/18/2014 - 14:55 | 5569302 Manthong
Manthong's picture

We bullshitted some folks..

Thu, 12/18/2014 - 15:22 | 5569453 SilverIsKing
SilverIsKing's picture
<- Russia Has Been Buying Gold, According To SilverIsKing

<- Russia Has Begun Selling Its Gold, According To SocGen

Who ya gonna believe?

Thu, 12/18/2014 - 15:28 | 5569466 nope-1004
nope-1004's picture

It's obvious to me:  Russia would rather buy Comex futures than worry about physical.  What, with transportation charges 'n all, futures is where it's at baby!

 

And the other point I want to make is that in war, truth is the first casualty.  I don't believe what ANY western bank says or does.  They're all insolvent and will die soon.

 

Thu, 12/18/2014 - 15:41 | 5569567 synergize
synergize's picture

Please tell me SocGen isnt quoting the defunct business insider story...

 

http://www.businessinsider.com/russia-gold-hoarding-ruble-problems-2014-12

 

This was FOREX reserves not necessarily gold...

Thu, 12/18/2014 - 15:50 | 5569627 Divided States ...
Divided States of America's picture

Russia maybe selling a portion of its gold like SocGen says...maybe the Russians did some testing on recent gold purchases (they bought so much recently), found some tungsten filled bars in their purchases, and is offloading these worthless bars in the markets while they still can.

Thu, 12/18/2014 - 16:09 | 5569707 SilverIsKing
SilverIsKing's picture

Wouldn't they do the testing before taking delivery in the first place?

Thu, 12/18/2014 - 17:12 | 5569993 COSMOS
COSMOS's picture

Why sell it for shit dollars when you can use it to underpin your rouble and make it strong overnight. Total BS story.

Thu, 12/18/2014 - 19:36 | 5570607 Jeff the Terrible
Jeff the Terrible's picture

It's sand. In 100 years it's still gonna be sand.

http://y2u.be/VI6tBwVjyOY

Thu, 12/18/2014 - 21:41 | 5571017 Save_America1st
Save_America1st's picture

So, if Russia sells it's gold to China (The Golden Hoover), does that or would that affect the SCUMBAG, FRAUDULENT, CRIMINAL, CARTEL MANIPULATED PAPER MARKET????

I mean, fuck...Say Russia sells it's gold to China for U.S. T's...Russia can dump those T's for China, right?  Or something like that.  Dump those T's for dollars to spend on all those China/Russia projects that are lined up and ready to go and would be all at the expense of the SCUMBAG, FRAUDULENT, CRIMINAL, CARTEL FEDERAL RESERVE and at the expense of the American public.

Is Russia and/or China really in a bad spot here with relatively low debt, high FX reserves, especially in U.S. shit paper that WE have to pay for when they DUMP it, massive phyzz gold holdings compared to the U.S., and they can just use all that to build pipelines, buy more phyzz gold and silver cheap on the back-side, buy more oil cheap, drive down oil prices which are crushing the U.S. oil projects and shitty levereged loans (which will cause major bank defaults along the way to a massive crashing domino effect), and fund the rest of the Russian/China/BRIICS strategic plans to exit the shit U.S. petro-dollar and end the dollar as the world reserve currency.

What's the West gonna do?  What's America going to do?  You know what I see our SCUMBAG, FRAUDULENT, CRIMINAL, CARTEL, MARXIST, TREASONOUS, government doing right now?  

Well...they just overturned the one small portion of the Dodd-Frank bill so that the banks can risk everything we've got on more casino derivatives all at our expense and their profit!!! 

Wow....NOT WINNING.  I'm pretty sure Russia and China read ZeroHedge, HAHAHA...unlinke 99% of most Americans and probably most Euro-Peons as well, so I'm pretty sure they know what our CON-gress critter scum just did to allow these criminal banksters to destroy the system all over again.

I'm pretty sure they know what to do to deal with that and to prosper from it when there's serious blood running in the streets after all this totally goes nuclear meltdown.

So fuck it.  As I always says, bitchez...KEEP STACKIN' THE PHYZZ!!!  It's on sale still...get it...got it...good. 

 

Thu, 12/18/2014 - 22:00 | 5571056 Save_America1st
Save_America1st's picture

Don't usually reply to myself...haha...

But speakin' of stackin' phyzz...just checked my email, and Silver Doctors (no affiliation, ;-) has silver Buffs on sale any quantity right now for .75 over spot!

http://sdbullion.com/silver/generic-rounds/1-oz-silver-ntr-buffalo-round

Just sharing the X-mas love, bitchez.

Don't buy any Chinese bullshit for Christmas. 

Give all your friends and family some kicks ass, brand new, nice and shiny phyzz silver Buffs, Eagles, Maples, Phils, or any other awesome private mint stuff that you choose! 

Don't give them any stupid gift cards, gift certs, cheap-ass clothes, stupid fucking video games, flat panel TV's or whatever, yadda, yadda, yadda.

Give the gift of silver...insurance outside that criminal bankster system with no countery party risk and a preservation of wealth!  Plain and simple.

Educate your friends and family this Christmas.  Give the phyzz silver.  But also give them an education.  I recommend a couple kick ass books:

The Creature From Jekyll Island,  END THE FED,  The Road To Serfdom,  Liberty and Tyranny,  The Liberty Amendments,  Currency Wars,  The Money Bubble,  Strategic Relocation,  you get the drift...And give them a book with a silver dollar with it. 

WAKE THEM UP!

Give them ammo if they have guns of the caliber they own.  Give them some Mountain House food storage or other stuff like that.  Water filtration systems (I recommend Pro-Pur), etc. etc.

No more bullshit from China...make it count.  Give them a 1/10 Gold Eagle.  THEY'RE ON SALE AND CHEAP AS HELL, BITCHEZ!!!!  Or give them 20 ounces of Buffaloes or Eagles...still cheap as fuck! 

MAKE....THEM....THINK!!!   USE YOUR GIFT TO WAKE THEM UP!!!

It's the gift that will keep on giving. ;-)

 

 

 

 

 

Thu, 12/18/2014 - 22:24 | 5571128 7.62x54r
7.62x54r's picture

Who is this Socgen idiot, and why should anyone beleive them?

Thu, 12/18/2014 - 23:30 | 5571294 AssFire
AssFire's picture

This rumor has been dispelled- http://goldchat.blogspot.com.au/

Russia would never sell their gold.

 

Thu, 12/18/2014 - 23:42 | 5571343 Stuck on Zero
Stuck on Zero's picture

Russia is spreading the rumor to drive the price down.  It then uses its foreign reserves to buy physical gold.  Win. Win.

Fri, 12/19/2014 - 01:53 | 5571530 bunzbunzbunz
bunzbunzbunz's picture

Gorsh I can't tell...Does anyone here make money selling PMs?

Fri, 12/19/2014 - 05:37 | 5571688 winchester
winchester's picture

fake frog information,

 

russia do not sell gold, it buys gold...

 

i fixed it for you  :)

Thu, 12/18/2014 - 22:05 | 5571068 jerry_theking_lawler
jerry_theking_lawler's picture

Who said they ever 'took delivery' in the first place?

Think about it....Russia buys 55t of gold....how much you think they were able to get their hands on phsycially. Now, if you are sitting in their position, why not sell the 'gold' that you have paper on (and not the phyzz). Gets them out of a whole on currency problems, drives the price of gold down further, plus, if things went really bad, the West would just seize the 'paper' gold anyways....sounds like a perfect plan. Now, see if they are soaking up phyzz under different entities all the while.....

Thu, 12/18/2014 - 21:32 | 5570985 flapdoodle
flapdoodle's picture

What better way to drop the price of gold. The Russians may do just the reverse of what they are "rumored", e.g. buy as much gold as they can and back up the truck - and pay for it by ditching their supply of US Treasuries... Kills two birds with one stone.

Fri, 12/19/2014 - 06:04 | 5571690 Anasteus
Anasteus's picture

Russia has other choices than to sell gold. In fact, they can sell paper gold if they want to and demand physical delivery from Comex; that would be a firework. Selling physical would be the dumbest option. They could first dump their treasuries or denominate oil sales in rubles, just to mention a few. One should not make Putin a total idiot.

SocGen's wishful thinking transformed to neocon's propaganda is understandable. Spreading it out here is much less.

Thu, 12/18/2014 - 15:00 | 5569343 KnuckleDragger-X
KnuckleDragger-X's picture

Rumor says....

Thu, 12/18/2014 - 15:54 | 5569641 Crash Overide
Crash Overide's picture

You don't spend all that time buying gold just to turn around and sell.

Putin is still a few moves ahead...

Fri, 12/19/2014 - 11:03 | 5572377 mkkby
mkkby's picture

Russia suddenly woke up and realized gold is just a barbarous relic.  Better to keep those paper reserves backed by their enemies.  Much more valuable and a better defense against sanctions.

Thu, 12/18/2014 - 15:34 | 5569525 kchrisc
kchrisc's picture

"Or they cannot sell the US treasuries?"

Actually they can sell their US treasuries. They can use them like China has been doing by trading them for foreign assets.

Above all, they can trade them with an entity that can sell/trade them elsewhere. Like China.

My point is that China can, and probably is, serving as a great go around of the Zionist west's financial acts of war against Russia. And the west will have a difficult time trying to stop such actions, as then what will be available for sale in Walmart, Taget...?

The banksters need to repay us.

Thu, 12/18/2014 - 16:07 | 5569686 Chupacabra-322
Chupacabra-322's picture

Criminal Fraud UNITED STATES, CORP. INC. are useless IOU's.

Thu, 12/18/2014 - 16:27 | 5569789 boogerbently
boogerbently's picture

"Should read:

"Russia used $4.3 Billion in gold in trading to circumvent the USD....."

Thu, 12/18/2014 - 16:30 | 5569796 Mountainview
Mountainview's picture

Indeed, they should do the contrary, peg the Rouble to Gold

Thu, 12/18/2014 - 17:32 | 5570115 RaceToTheBottom
RaceToTheBottom's picture

Folks, I told you yesterday I was in negotiations with Vlad to purchase 2 or possibly 3 kilos of gold.  

My price is 800$US per ounce, but negotiations are continueing.  I will keep you appraised.

Thu, 12/18/2014 - 20:19 | 5570747 TheReplacement
TheReplacement's picture

These media pieces are just the western banker mafia informing Russia that the pain will all stop if Russia just hands over the gold. 

Thu, 12/18/2014 - 20:38 | 5570818 Amerikan Patriot
Amerikan Patriot's picture

Have they not been consulting with you??

Fri, 12/19/2014 - 01:34 | 5571517 agNau
agNau's picture

I would believe this if it were front page Enquirer before SocGen.

What Putin needs to do is to send a "salted" bar over to SocGen, only don't use Tungsten. Sure the weight would be off, but I'd love to be there when they drilled it.

Thu, 12/18/2014 - 15:10 | 5569350 Paveway IV
Paveway IV's picture

Someone correct me if I'm wrong here.

There's a difference between sales of Russain gold production and Russia selling its gold reserves.

Russian gold reserve = zero reason to sell an oz.

Russain gold production = almost no external Q2, Q3 sales because of sanctions and Western banks scheming. Russia reluctantly buys it up for their own gold reserves.

Global supply suffers during loss of Russian production. Gold lease rates eventually skyrocket through end of November. 

Russia and India (and China) chat it up, bypass USD and Western banks, and India (and China) start buying damn near all Russian production starting in December. Since there is so much demand from either country, Russain production purchases are not that big of a deal to them. To Russia, it's just 'normal' gold production sales like it was before sanctions - just different customers and NO USD involved - China and India have currency swap agreements with Russia.

Lease rates drop Dec. 1st because of the restored supply from Russian production. The effect is only temporary because of huge demand. Lease rates start climbing again because there is still not enough to go around. This will eventually be manifested in higher gold prices, which the West is actively fighting for some reason.

Russia IS selling its normal gold production again, just not in USD. It is NOT selling its gold reserves for any currency. It does not want to or need to sell its reserves.

Bypassing USD sales of gold has thrown a monkey-wrench into the Western banks' ability to supress gold prices at will. Western banks are panicing because they're losing control and probably have a bazillion USD in derivatives going south since they can't force gold lower - at least as cheaply as the scheme was previously costing them. 

Thu, 12/18/2014 - 15:17 | 5569434 Paveway IV
Paveway IV's picture

Oh - and none of that is good news. Western banks might have finally screwed the pooch in gold manipulation, but they will never lose their money. How convenient that the bank derivative welfare act was recently passed. 

Better get the 160th SOAR's black helicopters to start evacuating the Federal Reserve District offices NOW. The wood chippers are coming and they're hungry for some fat-ass Ponzi banksters.

Thu, 12/18/2014 - 15:57 | 5569654 Crash Overide
Crash Overide's picture

I have a feeling when all of this is over we might be saying:

"well that escalated quickly..."

 

...and hopefully there is a message to future generations that think ponzi's are a good idea.

Thu, 12/18/2014 - 20:23 | 5570759 TheReplacement
TheReplacement's picture

Hopefully we are actually still around when this is over so we can say... anything.

Thu, 12/18/2014 - 17:11 | 5569906 Paveway IV
Paveway IV's picture

The way I understand Russian gold production and sales: Russian producers cannot sell directly to international buyers. They sell all their production to a few internal (to Russia) dealers at market rates. These internal dealers then sell to foreign buyers. Where it gets hazy for me is what entity in the Russian government bought the gold that the dealers could not sell (because of sanctions/banks). If the Russian Central Bank bought the unsold gold BTW, then they paid in rubles, not USD. 

One possible reason for the appearance of sales by the RCB is if they originally had to buy the 122 tonnes of unsold gold from the dealers. I used the term 'reluctantly' because they had no intention of adding that much to their gold reserves that quickly - they just had to buy it per some kind of agreement with Russian dealers otherwise stuck with it earlier this year. The RCB would have had an equally difficult time selling that much gold if Western banks were reluctant to make any sizeable deals in USD with Russia. 

The 122 tonnes ($4.5 billion or so) was sold by the RCB at the beginning of December to India or China. So the RCB *may* have done the selling, but this was never really 'reserve' gold as far as they were concerned. They simply acquired it as a result of arrangements with Russian producers and dealers markets and finally unloaded it.

For the West, it means they are now permanently locked out of 50 tonnes a quarter of Russian supply they use to be able to count on. If Russia can get the same prices in direct sales to Chinese and Indian markets, then there is no need to go through Western bulliion banks and their USD financial clownfuckery.

The question is then: How many times did Western bullion banks re-re-re-hypothicate the Russian gold they previously bought? They may have shot themselves in the foot by snubbing Russian dealers earlier this year. $8 billion or so a year in Russian physical goes a long way when you leverage it 20x on paper and keep rolling it forward. Now Western banks have to unfuck themselves from all that paper leverage they can no longer roll because they just permanently lost access to 200 tonnes/yr of Russian physical that kept part of the Ponzi going.

If lease rates explode in the next few weeks, then you know every bank is trying to be the first one out of the Ponzi. They better have their WWIII false flag all set up - they're going to need it this time.

Thu, 12/18/2014 - 17:46 | 5570187 bbq on whitehou...
bbq on whitehouse lawn's picture

The question is selling gold for what? if you sell gold for rubles you have a gold backed currency. If you sell it for euros you have a euro backed currency. If you sell it for oil then you have a... Ya cause thats how you get gold into the finacial markets. You need a currency to buy a currency. Whats in your currency?

Thu, 12/18/2014 - 15:04 | 5569364 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

In similar news, I'm proud to report that I got a blowjob from Christy Turlington last night...

This appears to be true, according to unnamed sources.

Thu, 12/18/2014 - 17:33 | 5570110 aPlayer
aPlayer's picture

Did it happen after watching this clip?

https://www.youtube.com/watch?v=9zS_OPmASOc

Thu, 12/18/2014 - 15:50 | 5569617 StrangerThanFiction
StrangerThanFiction's picture

Nice!

Thu, 12/18/2014 - 16:23 | 5569762 Hulk
Hulk's picture

Is that a before or after photo, cause she looks a bit concerned...

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