Bank Of Russia To Buy “Considerable Figure" Of Gold Tonnage In 2012

Tyler Durden's picture

From GoldCore

Bank Of Russia To Buy “Considerable Figure" Of Gold Tonnage In 2012

Gold’s London AM fix this morning was USD 1,560.50, EUR 1,240.66, and GBP 996.04 per ounce. Yesterday's AM fix this morning was USD 1,558.50, EUR 1,239.27, and GBP 993.62 per ounce.

Silver is trading at $28.30/oz, €22.60/oz and £18.13/oz. Platinum is trading at $1,430.00/oz, palladium at $588.70/oz and rhodium at $1,275/oz.

Gold was off $1.70 or 0.11% in New York yesterday and closed at $1,559.50/oz. Gold fell in Asia prior to gains late in the session and these gains continued in early European trading as lower prices are leading to some safe haven demand.

Gold USD Chart – (Bloomberg)

Gold looks set to see a fourth consecutive monthly loss which will be bearish technically. Gold will need to rally nearly $100/oz between now and end of trading of next Thursday May 31st to not incur a monthly loss of some 6% in May. 

It will be the first time it has had four consecutive monthly losses since the four months to January 2000 – prior to the current secular bull market. 

Gold’s monthly decline is primarily in dollar terms and therefore a dollar phenomenon as it coincides with a very poor month for the euro which currently is down nearly 5% versus the dollar.

Thus, gold is only down 1% against the euro while most European equity indices are down by 5% plus.

Although gold is a safe haven, in recent days speculators and investors burnt by riskier assets like equities, oil and industrial metals have been forced to liquidate their gold paper positions to cover losses in other markets. 

While speculative players in futures markets can exert considerable influence in the short term, as ever physical supply and demand will be the ultimate arbiter of price in the long term.

The debt crisis in Europe looks like it may spiral out of control and trigger a global economic slowdown and contagion which will again support gold in the long term.

Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded fund, rose for a second day to 1,270.30 metric tons yesterday. Demand in Asia outside of India was “good” yesterday and interest in Europe is “evident,” UBS said in a report this morning.

Premiums of gold bars in Tokyo rose to as much as $1.50 per ounce above London prices, the highest level since last March, as investors turned from sellers to buyers during this most recent price correction, dealers told Reuters.

The IMF central bank gold demand figures for April were very bullish and suggest that central bank demand in 2012 may be even higher than the 456.4 tons added last year – which was the most in almost five decades.

The World Gold Council estimates that central banks will buy as much as 400 tons this year.

The data yesterday suggests that demand may be even higher than these levels and there is also the near certainty that larger central banks, such as the People’s Bank of China, are quietly accumulating gold reserves and not reporting their purchases to the IMF - as was done previously.

XAU/EUR Currency Chart – (Bloomberg)

Today, the deputy chairman of Russia's central bank, Sergey Shvetsov, said that the Bank of Russia plans to keep buying gold on the domestic market in order to diversify their foreign exchange reserves.  

"Last year we bought about 100 tonnes. This year it will be less but still a considerable figure," Shvetsov told Reuters on the sidelines of a financial conference in Milan.

Russia's gold and foreign exchange reserves fell to $514.3 billion in the week ending May 18, from $518.8 billion a week earlier. However, they have risen from the $498.6 billion seen at the end of 2011.

Yesterday, Shvetsov said that Greece has plans for a parallel currency and that it is a “necessity” for Greece to leave the euro.

US exchanges are closed on Monday for Memorial Day.

XAU/GBP Currency Chart – (Bloomberg)

(Bloomberg) -- CME Group Cuts Margins for Gold, Hog, Lumber Futures 
CME Group Inc. cut margins for gold on the Comex in New York.

The amount that speculators must keep on deposit for an initial account in gold futures was reduced to $9,113 from $10,125, CME Group said today in a statement on its website.

CME also lowered margins for hog and lumber contracts.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

Cross Currency Table – (Bloomberg)

Gold weakens on euro, on track for 6 pct loss in May - Reuters

Italians recycle family gold – The Financial Times

Gold ends up but stronger dollar limits gains – Reuters

Greek Exit Could Trigger a Run on European Banks – Business Week

Gold is near a critical turning point – where will it go next? - MoneyWeek

James Rickards: Currency Wars – The Making Of The Next Global Crisis - GoldSeek

Police Urging Greeks To Stop Stuffing Mattresses – Zero Hedge

Bond exodus on a par with eurozone bank run - The Financial Times

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Oh regional Indian's picture

Hey Sweatshop, zhvneek zhvnok!

Rooshia needs gold like a chubster needs a supersize burger. It's got everything the world will be ready to throw gold at it's feet for in the upcoming years.

Classic three card monty-python.

The weirdest thing is no one, NO ONE< not GATA, definitely no common man, has the right or th eability or the reach to verify ANY of this. NONE. 

All this CB/BIS/BS could be the biggest joke, head fake in history. 

Anyone? How do we know this tonnage movement is true?

Because they say so?




Pladizow's picture

ORI - you should believe none of it and stay in paper!

Harlequin001's picture

'Bank Of Russia To Buy “Considerable Figure" Of Gold Tonnage In 2012'

That's as good a reason as any for the price to drop I suppose...

I should be getting the hang of it by now...

GetZeeGold's picture



I should be getting the hang of it by now...


Yes......yes you should.



Raymond Reason's picture

Russian also retooled their education system about five years ago, from producing white collar to producing blue collar manufacturing rabochee.  Much of their ag land was leased to Western companies, and they are not renewing those leases.  Putin may not be Ron Paul, but it is obvious to some, that he actually wants his country to succeed, rather than just raping and pillaging for personal gain like our dear leaders.  Unlike America, Russia does not have a culture of instant gratification, and people there understand concepts like hardship, sowing / reaping, sacrificing for children. So yes, ORI, i can believe they are buying gold. 

Levadiakos's picture

Who would consider Russian central planners "smart money"?  They have a demostrated lack of skill

AurorusBorealus's picture

I once had drinks every weekend with some dyed-dyed-in-the-wool Soviets, who believed that computers would solve the problems of central planning.  These were very smart guys.  The problem was not with the Soviet Union or the Russian education system, possibly the best education system in the world.

The problem is with central planning.  There is no model, no proper catagories in which to organize data, and no equations to translate data into a model for the sum total of all human economic life.  In fact, what is economics?  If you ask modern economists in the West, the only metric is money, and the whole system is nothing more than the same double-entry book-keeping that Italian merchants invented in the 15th century.  You cannot plan-out the course of every human life on earth-- no matter how noble your intentions (and no one with this type of power will ever have noble intentions).

The Soviets response to my objections... "with a computer powerful enough..."

Lucius Cornelius Sulla's picture

Bearish.  Governments are always the last one to the party in a bull market.  

oddjob's picture

Russia is buying Gold, USA is buying its own T-Bills with fresh paper.

LULZBank's picture

Russia is buying Gold, USA is buying its own T-Bills with fresh paper.

Thats because Gold is backed by nothing while USD and T-Bills are backed by the US government .... duh!

kridkrid's picture

Great moments in finance news history.  Better than the report... the woman at the desk who didn't miss a beat when it was tossed back to her.

tekhneek's picture

I always thought "risk assets" were more along the lines of things that are and become literally worthless over time.

Seems like it doesn't get a whole helluva lot riskier than that.

LULZBank's picture

Bank Of Russia To Buy “Considerable Figure" Of Gold Tonnage In 2012

Read - Bank of Russia already bought considerable figure of Gold tonnage in 2012.

i.e. I already had my portion and now Im gonna piss in your plate.

DoChenRollingBearing's picture

I too am hoping to buy a "considerable figure" of gold this year as well.

mrktwtch2's picture

somebody has to buy near the top..when the dollar rallies another 15% as the euro will be under 1100..

qussl3's picture

If they kick the can, a whole shit ton of EUR shorts are going to be heading for one tiny exit.

Odd there is little mention of the epic fiscal drop off over the horizon enroute for the US.


bdc63's picture

I think we might see some of that short covering rally today ... I don't want to be massively short or long ANYTHING going into a 3 day weekend...

JustObserving's picture

Dollar explodes higher as US unfunded liabilities crossed $119 trillion today (1,047,158 per taxpayer) with US debt at 15.774 trillion (138,539 per taxpayer)?  

A very improbable event but you can never underestimate human stupidity.

Hulk's picture

World wide debt to GDP approaching 350%, brand new territory, I wonder how this works out ???

Not really...

Got Gold ???

The sale is about over...

bdc63's picture

it is an enigma wrapped in a riddle surrounded by a mystery

Clashfan's picture

sounds like Ferrie in JFK  :)

ISEEIT's picture

When a dead cat bounces, it's still a dead cat.

krispkritter's picture

And in some's what's for dinner.

kridkrid's picture

Schroedinger begs to differ... eventually yes... the timing is a little bit harder to ascertain.

Mr Lennon Hendrix's picture

While the world gets mauled by Bernanke's massive printing at the behest of the USTs Geitner, who issues hundreds of billions of dollars of debt into a Nation with negative growth in real terms, everyone looks at the fundamentals and screams about deflation; "It is right around the corner, because that is what happened last time.  In '08, '87, etc, that is what happened."

But what is going to cushion it?  The fact that the banks and all corporations have a massive amount of hot, wet, stinky cash?  People are yelling at the banksters, but the banksters not only have no power, they hold no water!  They have created an illusion, and you all are going along with it!

Do something!

Buy silver!

toady's picture

Even the dumbshits have figured it out.

If the Russians are buying it's almost over, they are ALWAYS the last to figure things out.

Keep your heads down, this is gonna be a big one!


orangegeek's picture

China and Russia buying more gold, but the US is backed by it's global corporations and it's military.


Al Huxley's picture

Military funded by creditors - 'hey, loan us another couple of trillion, we need to fix up our airforce so we can come over there and whip your ass'.

FEDbuster's picture

The US "dollar" FRN and US multi-national corporations are both backed by the US military.  Obumber is on track to reduce our military dramatically.   What effect will this have on our military backed reserve currency and corporations?  Will the threat of "you will take our dollars for your products and oil, or else" still work?

Overfed's picture

O'bomba ain't reducin' nuthin'. He's got a few more wars to start, the military will remain at full strength.

peekcrackers's picture

" The World Gold Council estimates that central banks will buy as much as 400 tons this year"

HEY CNBC.. they'er not talking paper ...  ya bunch of bubble humpers

Shibumi2's picture

Opinions are like ASSHOLES...everyone has one.


Unfortunately, there are a lot of "OPINIONS" here on ZH on the topic of gold.


Seriously, one can buy gold, or not, but who in their right mind could argue against the fundemental principal of accumulating GOLD in LIEU of paper FIAT?


Has to be a network of shills trying to talk gold down. In my shitty town alone, there are three gold4fiat places, but no one selling.


Wonder why?

oak's picture

sell high priced us treasuries for the over priced us$ to buy cheap Au. sounds logical?

gtb's picture

Russia is buying...Who is selling?

FEDbuster's picture

Producers?  China is buying up all their domestic production, I imagine Russia is doing the same thing.  On occasion the IMF or someone else offers large amounts for sale, and central banks act as buyers.

oldgasII's picture

I'm wondering it they are buying the gold from internal or external sources.  I seem to remember seeing photos of Putin and company looking a some bullion that was sourced from Russian gold mining companies.??  The price for Russian oil and gas may drop but I have the feeling the ruble is not going to lose it's purchasing power.  Soon  it may be Roosians and Chinese buying high price condos near their banks on Wall Street.  A lot of the screams about recent drops in the price of gold strike me as kind of suspicious. Gold was what back in 2008, $800. Now it is bumping between $1500 and $1600.  Is it the long buy an hold people crying about nearly doubling their money??

Madcow's picture

higher taxes = deflation

less govt spending = deflation

money coming out of the system to buy gold = deflation

increasing regulatory burdens = deflation

peak cheap energy = deflation


this is really a great market for nimble traders.  as the virtuous cycle of falling rates, increasing asset prices and falling commodity prices has given way to a viscious cycle of zero bound rates, decreasing asset prices and rising commodity prices - all you have to do is the opposite of what worked in the 80s,90s,00s.   "Buy the dips" => "short the rallies"   easy.   just tell all the instutitions.    maybe we can all get rich shorting FB. 





killallthefiat's picture

Can't understand why anyone would hoard so much tungsten.


You can do a direct deposit right here in this hot Russian workout girl.

No Euros please we&#039;re British's picture

Not a good idea to hoard tungsten. When Fort Knox is opened up the market will be flooded with the stuff.

KandiRaverHipster's picture

central banks are trying to crush gold so they can buy it for less money...why, i don't know, since technically they have unlimited dollars.

LULZBank's picture

Dont expect anyone to tell you the "whole truth."

Not even the Tylers ;)

viahj's picture

it only seems that they have unlimited dollars, eventually hyperinflation will solve the dollar issue then it's on to gold/commodity backed SDRs.  everyone else in the world already knows this and are positioning themselves accordingly while trying to not spook the herd sparking price inflation reducing the purchase power of their massive dollar holdings while they accumulate.

KandiRaverHipster's picture

reminds of me Escape From LA towards the end where snake plissken claims he has "Bluebacks" since greenbacks are worthless.