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

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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)

OTHER NEWS
(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)

NEWS
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

COMMENTARY
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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Fri, 05/25/2012 - 09:35 | 2461930 SilverTree
Fri, 05/25/2012 - 09:51 | 2461988 Oh regional Indian
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?

;-)

ori

Gould

Fri, 05/25/2012 - 09:56 | 2462018 Pladizow
Pladizow's picture

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

Fri, 05/25/2012 - 10:20 | 2462127 Harlequin001
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...

Fri, 05/25/2012 - 13:36 | 2463050 GetZeeGold
GetZeeGold's picture

 

 

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

 

Yes......yes you should.

 

 

Fri, 05/25/2012 - 10:48 | 2462244 Raymond Reason
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. 

Fri, 05/25/2012 - 11:19 | 2462410 Levadiakos
Levadiakos's picture

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

Fri, 05/25/2012 - 12:04 | 2462644 AurorusBorealus
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..."

Fri, 05/25/2012 - 09:37 | 2461937 Lucius Corneliu...
Lucius Cornelius Sulla's picture

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

Fri, 05/25/2012 - 09:40 | 2461948 oddjob
oddjob's picture

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

Fri, 05/25/2012 - 09:56 | 2462014 LULZBank
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!

Fri, 05/25/2012 - 10:05 | 2462046 kridkrid
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.

Fri, 05/25/2012 - 11:11 | 2462371 tekhneek
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.

Fri, 05/25/2012 - 09:52 | 2461997 Croatian Patriot
Croatian Patriot's picture

Depends of governments. LOL

Fri, 05/25/2012 - 09:37 | 2461941 LULZBank
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.

Fri, 05/25/2012 - 09:37 | 2461942 DoChenRollingBearing
DoChenRollingBearing's picture

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

Fri, 05/25/2012 - 09:38 | 2461945 mrktwtch2
mrktwtch2's picture

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

Fri, 05/25/2012 - 09:42 | 2461958 qussl3
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.

 

Fri, 05/25/2012 - 09:51 | 2461992 bdc63
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...

Fri, 05/25/2012 - 09:47 | 2461968 JustObserving
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.

Fri, 05/25/2012 - 09:52 | 2461995 Hulk
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...

Fri, 05/25/2012 - 09:53 | 2462003 bdc63
bdc63's picture

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

Sat, 05/26/2012 - 02:01 | 2464660 Clashfan
Clashfan's picture

sounds like Ferrie in JFK  :)

Fri, 05/25/2012 - 11:52 | 2462570 Gazooks
Gazooks's picture

..or the ESF.

Fri, 05/25/2012 - 09:53 | 2462002 ISEEIT
ISEEIT's picture

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

Fri, 05/25/2012 - 10:07 | 2462058 krispkritter
krispkritter's picture

And in some countries...it's what's for dinner.

Fri, 05/25/2012 - 10:08 | 2462066 kridkrid
kridkrid's picture

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

Fri, 05/25/2012 - 09:41 | 2461953 Mr Lennon Hendrix
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!

Fri, 05/25/2012 - 09:48 | 2461977 toady
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!

FIRE IN THE HOLE!

Fri, 05/25/2012 - 09:48 | 2461979 orangegeek
orangegeek's picture

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

 

Fri, 05/25/2012 - 09:54 | 2462004 Al Huxley
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'.

Fri, 05/25/2012 - 09:58 | 2462022 FEDbuster
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?

Fri, 05/25/2012 - 10:31 | 2462167 Overfed
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.

Fri, 05/25/2012 - 11:54 | 2462582 Gazooks
Gazooks's picture

dem's jobs

Fri, 05/25/2012 - 09:49 | 2461980 peekcrackers
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

Fri, 05/25/2012 - 09:51 | 2461987 Shibumi2
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?

Fri, 05/25/2012 - 09:54 | 2462009 oak
oak's picture

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

Fri, 05/25/2012 - 09:57 | 2462016 gtb
gtb's picture

Russia is buying...Who is selling?

Fri, 05/25/2012 - 10:00 | 2462028 FEDbuster
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.

Fri, 05/25/2012 - 11:55 | 2462586 oldgasII
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??

Fri, 05/25/2012 - 09:57 | 2462020 Madcow
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. 

 

 

 

 

Fri, 05/25/2012 - 09:59 | 2462026 killallthefiat
killallthefiat's picture

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

Fri, 05/25/2012 - 10:15 | 2462102 UTICA CLUB XX PURE
UTICA CLUB XX PURE's picture

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

 

http://www.youtube.com/watch?v=COGUt94VrLI

Fri, 05/25/2012 - 10:16 | 2462108 No Euros please...
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.

Fri, 05/25/2012 - 10:18 | 2462116 KandiRaverHipster
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.

Fri, 05/25/2012 - 10:31 | 2462165 LULZBank
LULZBank's picture

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

Not even the Tylers ;)

Fri, 05/25/2012 - 11:00 | 2462318 KandiRaverHipster
Fri, 05/25/2012 - 11:02 | 2462328 viahj
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.

Fri, 05/25/2012 - 11:11 | 2462372 KandiRaverHipster
KandiRaverHipster's picture

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

Fri, 05/25/2012 - 10:30 | 2462159 LULZBank
LULZBank's picture

I can already see the end, and it only ends in LULZ and tears.

Once all the Gold has been bought, then the States would go to war with each other for the plunder, just as it ever was.

Smart ones would then think, they should've better invested in lead than in Gold! LOL

Fri, 05/25/2012 - 10:36 | 2462187 Overfed
Overfed's picture

Everybody knows that a well rounded PM portfolio contains brass, copper, and lead, to go along with the silver and gold. ;-)

Fri, 05/25/2012 - 10:45 | 2462216 ableman28
ableman28's picture

Curious.  Russia has an enormous amount of unrecovered gold in the ground, about 40% of the worlds known deposit.  They have a reachable production goal of 8 million ounces for 2015.  In the current price range nearly all of their deposits are economically recoverable quite a bit below the current spot not to mention the likely high end of $2000 for the next 24 months.   It would be vastly easier for them to increase production and accumulate from domestic reserves than to buy on the open market or even sell much of their production when spot peaks and still replace all that from in ground reserves.

 

 

Fri, 05/25/2012 - 11:05 | 2462343 viahj
viahj's picture

according to the article, that's what they are buying...domestic production.

Fri, 05/25/2012 - 10:46 | 2462220 Floodmaster
Floodmaster's picture

If oil become priced in gold...

Fri, 05/25/2012 - 10:55 | 2462286 jjsilver
jjsilver's picture

Could mean another raid is coming

Fri, 05/25/2012 - 11:09 | 2462362 jvetter713
jvetter713's picture

This may be my first post...I'm not sure but I've been a reader here for a little over a year.

My question may seem silly but it seems if the US has no problem printing massive amounts of money that gets blown on bullshit, why arent we printing an extra trillion or so anually and just loading up on gold and oil?

Fri, 05/25/2012 - 11:42 | 2462507 comfortably numb
comfortably numb's picture

Hey - then my first post in reponse, long-time reader as well -  your hypothetical trillion would buy a lot of gold and oil. A real one would fetch probably a half of that lot or less.

And don't take what Shvetsov says at face value. He usually speaks his mind, which is not necessarily matches the mind of the CB board

Fri, 05/25/2012 - 12:15 | 2462695 AurorusBorealus
AurorusBorealus's picture

The most interesting item in this post is Shvetsov's comment about Greece.  Could Russia be in quiet negotiations with Greece to "assist" them in exiting the Euro?  This seems very Russian and very much in Russia's national interests.  Could Russia step in, maybe even to back a new Greek currency (possible with gold) in exchange for some basing rights, bilateral military agreements, etc.? 

Fri, 05/25/2012 - 12:25 | 2462724 comfortably numb
comfortably numb's picture

"in quiet negotiations with Greece "

Who personally would you suggest to negotiate with there at the moment, to honour future deals?  

The generals ... ?

 P.S. and see my comment above. If there were negotiations, Svetsov would learn about them from papers

Fri, 05/25/2012 - 12:29 | 2462762 flyingpigg
flyingpigg's picture

A lot of predictable knee-jerk reactions... I would not read too much into it. Russia exports a lot of oil, Natural gas and refinery products and they just want to get rid of the excess dollar reserves. They used to buy bonds but I guess they don't like the counter party risk anymore. So it's not that much a Russian CB decision to buy gold but a lack of alternatives where to spend dollars.

Fri, 05/25/2012 - 12:36 | 2462799 onebir
onebir's picture

"CME Group Inc. cut margins for gold on the Comex in New York."
Isn't this a front-pager? (IIRC the margin hikes have been ;-)

Fri, 05/25/2012 - 13:22 | 2462993 TheCanimal
TheCanimal's picture

What about the children?

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