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Currency Wars Back as Russia Buys One Million Ounces of Gold in March
Currency Wars Back as Russia Buys One Million Ounces of Gold in March
- Russia buys one million ounces and increases gold reserves by another 2.6% in March
- Russia sees gold as important monetary and strategic asset in stealth currency wars
- Large purchase by Russia who normally buy some 300,000 ounces a month
- Russian gold reserves, at nearly 40 million ounces, are now fifth largest in the world
- Russia likely coordinating gold reserve accumulation with ex-Soviet States
- Concerns regarding euro and crisis in erstwhile reserve currency, the dollar
- Gold remains central to international monetary system
- Central banks continue to accumulate large volumes
Russia increased its gold holdings by one million ounces in March, bringing its total reserves to nearly 40 million ounces or 1,238 metric tonnes. The Russian one million ounce gold purchase is a large one even by Russian standards as in recent years they have consistently been buying roughly 300,000 ounces per month.
It followed a two month break from the gold market which had led to erroneous speculation that Russia was not interested in increasing its gold reserves any further.
Since 2005, Russia’s gold reserves have increased three-fold. As a comparison, in the second quarter of 2009, Russia only had 550 tonnes of gold in its official reserves meaning that their reserves have doubled in recent years.
Russia's gold reserves are now at least the fifth largest national gold reserves in the world or sixth largest if one includes the IMF.
Russia has consistently dollar cost averaged into gold throughout the global financial crisis and since the recent geopolitical crisis over Ukraine, their gold accumulation has increased.
In the last nine months of 2014, in the midst of sanctions and the collapse in oil prices which led to sharp falls in the rouble, the central bank continued to buy gold, demonstrating the vital strategic importance placed by the government of Russia on the precious metal.
The strategy has proven prudent as gold has acted as a hedge and protected Russia’s reserves from the declining value of the rouble and indeed the declining value of the euro (see chart below).
The ongoing accumulation of official gold by Russia is part of a reserve diversification strategy. Gold is held by central banks as one of their key reserve assets alongside foreign exchange assets including dollars and euros, and also IMF Special Drawing Rights (SDRs).
Some Russian analysts point to the threat of continued western sanctions on Russia as a renewed catalyst for the Russian central bank diversifying out of dollars and euro by increasing its gold reserves.
There is also the strong possibility that Russia is coordinating gold reserve accumulation with ex-Soviet States as we warned of last August.
Given very close economic ties and cooperation between Russia, Kazakhstan and Belarus, and a trajectory towards economic union, it is probable that the these and other ex-Soviet countries are coordinating monetary policy which would include a common approach to official gold reserves accumulation.
This will be worth watching in the coming months and years. Like China, it is possible that Russia and its allies may not be fully reporting their gold reserves accumulation to the IMF.
It is not obligatory that they do so and given the very frayed relationship with Washington it seems likely that at some point the Russians may adopt the Chinese stance and not provide data on their gold buying to the IMF.
The People’s Bank of China (PBOC) does not telegraph its intentions or gold purchases to the market as doing so would lead to a surging gold price and to a further devaluation of its foreign exchange reserves.
Aren’t the Russians likely to follow suit and either not declare or partially declare their gold reserve accumulation?
Must Read Guide Currency Wars: Bye, Bye Petrodollar - Buy, Buy Gold
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,197.70, EUR 1,120.26 and GBP 804.58 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,203.25, EUR 1,120.34 and GBP 806.31 per ounce.
Gold fell 0.71 percent or $8.60 and closed at $1,195.90 an ounce yesterday, while silver fell 1.66 percent or $0.27 closing at $15.99 an ounce.
Gold stayed below the $1,200 level as a stronger dollar and a rally in in global equities dimmed the yellow metal's safe haven appeal for now.
Spot gold in Singapore was down 0.2 percent to $1,194 an ounce near the end of day trading. Gold priced in the beleaguered euro is up another 0.6% today given weakness in the euro.
Russia's increased its gold reserves to 39.8 million troy ounces as of April 1 from 38.8 million ounces last month, noted their central bank (see blog).
Today, India celebrates the festival of Akshaya Tritiya which is one of the most auspicious days in the calendar to buy gold.
Gold purchases in India are reported to have been slow today due to the poor monsoon. Indians are the world's second biggest buyers of bullion and Akshaya Tritiya celebrated on today is usually one of the busiest gold-buying festivals along with Diwali and Dhanteras.
Gold imports in India more than doubled in March to 125 tonnes from 60 tonnes a year before as the trade anticipated healthy demand.
In Europe in late morning trading gold is up 0.2 percent at $1,199.90 an ounce. Silver is up 0.54 percent at $16.05 an ounce and platinum is up 0.27 percent at $1,152.50 an ounce.
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The US says 'Yes, we have all this gold but you can't see it.'
Proven gold reserves, proven oil reserves... Blah blah. I have a gold reserve too in my back yard.
On another note, China disclosed its gold reserves.
http://katchum.blogspot.be/2015/04/china-discloses-gold-reserves.html
Not.
http://www.kitco.com/news/video/show/Kitco-News/967/2015-04-20/How-Much-Gold-Can-Really-Be-Found-In-NYC
So this video states that the US FED. Reserve holds +8,000 Tons of Gold ......about 2% is owned by the US Government. The rest stored by other countries and Central Bankers who loan/Lease out other countrie's Gold which is why they don't like to have to return it to the Owners. (If you don't hold it, you don't Own It).
When this farce collapes, there will be Blood in the streets.............What did Rothschild say
Baron Rothschild, an 18th century British nobleman and member of the Rothschild banking family, is credited with saying that "The time to buy is when there's blood in the streets." He should know. Rothschild made a fortune buying in the panic that followed the Battle of Waterloo against Napoleon.
Some how I sence something is coming.......................
Here is the confusing part...in a world of trillions why does a few paltry billions spent on gold make news? Why cannot a country like China, that has the ability to buy every ounce of gold mined, indeed every above ground ounce ever mined, not just do it? Why, if they want gold, don't they just 'go get some'?
I think the reason is that they CAN'T. There is only 3000 tons mined a year. A few hundred billion dollar would buy it all! (less than $200 billion)....If countries want gold why don't they get a bunch?
The answer is because if they made a move they would immediately cause a massive increase in the price of gold. This would completely disrupt the market and make them greatly unloved. This will happen anyway as gold is still the universal hallmark of wealth. When international cooperation ends we will see gold at very high prices. Get some before this happens and you too can enjoy the ride powered by the actions of nations and the tide of history.
Okay, so their normal purchase is 300,000 a month, right?
They took two months off from buying any gold, according to the article.
This month they bought 1,000,000 ounces, which essentially just catches up on their set programme and, in dollar terms, is about 1.2 B. Chump change on a 2 T economy.
I'd be more interesting in hearing why they stopped buying gold for two months than I am in reading this over-hyped notification that they are catching back up on their regular acquisition programme.
At a guess, Russia's CB suspended all non emergency purchases pending resolution of the Ruble currency crisis. The crisis is over, and now they are resuming their purchases.
Probaly were holding fire for a couple of months to see if the $1200 range would hold or break down.
The price in rubles actually fell quite a bit over the last couple months.
It's important to know who's buying and selling gold and I look forward to seeing such stories, but I have a question: How good are these numbers? If countries can accumulate gold outside of channels that are publically reported, what good are the reported numbers?
The gold in Fort Knox has not been audited in over sixty years. What reason would any thinking person have for believing what's publically stated about those reserves?
The $US. is quite strong and seems to be a buying opportunity for personal preservation of wealth.
If you don't hold it , You don't own it. Oh ya...........Trust no one......Including the American Government.......
Obama will be confiscating whatever he can to pay the Slaves ancesters .............That way it will quickly filter back into the Banksters pockets.
Has anyone considered the converse?
In other words, someone(s) had to be on the other side of that trade and they were willing to accept fiat for that gold they sold.
There are two sides to the story and the thought above is being ignored by most.
Such trades, when reported to the IMF, are verified by the seller and buyer. That said, all these figures must be taken "with a grain of salt".
HOWEVER, these figures do NOT take into account:
1.) Gold mined and refined within Russia (which is a huge producer of gold)
2.) Gold mined and refined within China (which is another huge producer of gold)
3.) The smuggling of gold into India and other Asian nations, which is a HUGE business.
4.) According to U.S. law, physical gold can be leased or sold (from Fort Knox and the Federal Reserve) for financial instruments of equal value (e.g., currencies, bonds, etc.), but remain listed as physical gold reserves. Thus, NO ONE knows how much (if any) physical remains in Fort Knox and the New York Federal Reserve. (Some people have claimed that the Federal Reserve took physical possession of ALL the physical gold in Fort Knox (as part of the deal created in 1933 and amended several times since) in which all Americans were required to turn into the Federal Reserve banks all of their gold (except for rings, jewelry, etc.) in order for the Federal Reserve to extend additional credit to the U.S. government, which in 1933 was BANKRUPT.
This "exchange of financial instruments of equal value" most recently occurred starting in 2008 when the Federal Reserve exchanged TRILLIONS of U.S. dollars for foreign (mostly European) currencies. Congressman Ron Paul asked then Fed Chairman Ben Bernanke about this fact in several Congressional hearings, especially WHY such currency exchanges (i.e., "bail-outs") had not been reported. Bernanke answered that because such so-called "currency swaps" were simply another type of "exchange of financial instruments of equal value", they required no reporting, were totally legal and were kept "off-the-books" of the Federal Reserve (since theoretically, the value of the FED's assets had not changed). The practice continues to this day, such as with the post-coup Kiev regime in Ukraine: The Federal Reserve exchanges U.S. dollars for Ukrainian Hryvnias as an "exchange of financial instruments of equal value" which are kept "off-the-books" of the Federal Reserve. Given that the Ukraine economy is essentially DEAD, these "currency swaps" are the ONLY thing that has prevented the Ukrainian Hryvnia from losiing all of its value to the point of becoming worthless.
For a lengthier discussion of this topic, with a very important graph, see: "
“Who is “propping up” the Ukrainian Currency – Hryvnia (UAH) – PART II” on my blog at http://johnhenryhill.wordpress.com/2015/03/12/who-is-propping-up-the-ukrainian-hryvnia-uah-part-ii/John-Henry Hill, M.D.
retired physician; medical researcher; medical research programmer
http://JohnHenryHill.Wordpress.com
JohnHenryHill@Yahoo.com
Excellent point!
This had to be more of a transfer of gold than a purchase of gold.
That is INCORRECT.
A "transfer" occurs when (as an example) the New York Federal Reserve holds German physical gold (legally belonging to Germany), then ships some of it back to Germany. The ownership of the gold never changed.
Russia purchased its NEW physical gold with U.S. dollars, which as the world's "reserve currency" (currency of world commerce) is how all international payments are currently made - in U.S. dollars. Any good economist will tell you that any failure to deliver physical gold purchased with U.S. dollars would instantly "kill the U.S. dollar" as the world's "reserve currency". That is why economists, the Federal Reserve and the U.S. Treasury so closely watch the gold reserves held by COMEX and other majors sellers of gold - to ensure they always have enough gold to make full delivery of physical gold purchased with U.S. dollars.
I seem to recall an earlier ZH article which pointed out that Russia was buying direct from its miners in order to keep them from going bankrupt due to the spot price being at or near their production cost.
This gold was purchased with U.S. dollars on the international markets. Russia recently cut its entire budget by 10% (excluding the military and gold purchases from outside of Russia). Russia has hundreds of billions of U.S. dollars as "reserves" (as cash or U.S. bonds). But instead of using these U.S. dollars to "prop up" its currency (the Ruble) by buying up foreign-held Rubles with U.S. dollars, it allowed the Ruble to decrease in value. Instead, Putin and the Kremlin decreased the budget dramatically, reserving its U.S. dollars to buy foreign gold. A side effect of the cheaper Ruble was to INCREASE Russian exports, since they were now less expensive for foreigners.)
Gold mined and refined in Russia is NOT counted in the IMF's figures, since Russia (nor is any other nation) required to report it.
I am an American now living in Europe. Unlike in the Western Europe and America, eastern Europeans and Asians place very little trust in "paper money". They view only gold and silver as REAL MONEY. (As an aside, while in India GOLD is the precious metal of choice by the people; in China it is actually SILVER that is the preferred metal of the people by tradition.)
The sanctions against Russia made gold purchases difficult for foreign buyers. Something about potential restrictions on the way money was trarnsferred to the Russian bullion banks for purchases. Russia said there was always enough foreign demand at the prevailing prices, but veiled threats against foreign buyers doing business with Russia drove them to look elsewhere. The Russian government stepped in to ensure the gold miners could sell all their production. The mines and producers are not allowed to sell directly to buyers.
Perhaps, perhaps not. By buying directly from their miners, the government is able to obscure official purchases of gold. If you wish to accumulate, you do not signal the market.
As an old fucker, I remember when Americans trusted their government.
But, in the 1960's, if they had told the American people that they couldn't verify the gold in the Franklin Mint, it would have been a huge story on the news. It would have been a big story, even in the 1980s. At what point did it become a non-issue? I have to wonder if it was 9-11, when they took all the gold in the vault under the World Trade Center. That was when every headline became about terrorism. And yet, to this day, I have never heard one person utter a word about being afraid of terrorists coming to attack the US. So, the real terrorism has been the US government terrorizing the taxpayers with threats of incarceration, or worse, for questioning the US government. I could be wrong, of course.
If you were even older, you'd remember when Americans didn't trust that thief known as FDR.
The 'schools' have been purposely dumbing down the US population for a century. They went full retard starting in the 1960s.
Walk down the street and ask people what the significance of gold is to them, and at most - a few might show you their wedding ring.
Its not in the mainstream news because few Americans know anything about it.
I for one am very worried about terrorists coming to attack the US. They have already conquered DC, NY, Chicago, virtually all of California, and many other places.
Terrorists have long taken over the political institutions of this country and WS is chocked full of Financial Terrorists.
too little.
still fascinating to see that UK is out of the first 15
Putin for Nobel Peace Prize.
Fuck the NWO Zioconz.
It is harder to make gold illegal in just one country these days... As compared to the Great Depression ......
So why is gold down again today? Oh, that's right, it's only the "phony paper price" that's down.
Wow the dollar just crashed......
It had wanted to go back up and gold wasn't wanting to go down as it did in the early part of the year as in February as it was stubbornly hanging around 1200 bouncing back from any sell offs and developing a mind of its own from its suppression of the reality we face etc...
....the murders, or 'wet work' in Ukraine by the Kiev junta continues apace, eh?
". . . it is possible that Russia and its allies may not be fully reporting their gold reserves accumulation to the IMF."
Probably because they are buying gold so fast, it is hard to keep an accurate daily count. Paper gold, sure, you can get a balance by the minute, but physical gold has to be trucked and warehoused. The "in transit" account probably has HUGE swings every week.
More likely because one does not lead with a trump card (unless your hand is full of them).
Coming soon...
yeah, and how is it that China has been buying thousands of tons over the last several years, but the chart above shows they only have a little over 1000 tons?
And it doesn't even take into account that China mines over 400 tons per year and NONE of their gold is exported out of the country.
China could very well have over 15,000 to as much as 30,000 tons of gold by many other estimates I've read.
40,000
And if any country had all the gold the earth has to show, what then? They'd have a very heavy vault. That's about it.
It's always funny to see the US on top with its "deep storage gold reserves".
I'm going to invest in a metal detector to take the kids on vacation to Colorado this year.
Bear in mind to keep an eye out for precious gems while you are at it.
What? You don't believe them? Our government would never lie and it's stored with our fairy dust and unicorn pee strategic reserves......