Currency Wars - Russia Officially Adds 19.5 Tonnes of Gold Reserves in October Alone

Tyler Durden's picture

From GoldCore

Currency Wars - Russia Officially Adds 19.5 Tonnes of Gold Reserves in October Alone

Gold is trading at USD 1,680.50, EUR 1,268.60, GBP 1,084.30, CHF 1,554.30, JPY 130,130 and RUB 53,210 per ounce.
Gold’s London AM fix this morning was USD 1,676.00, GBP 1,084.02, and EUR 1,263.86 per ounce.
Yesterday's AM fix was USD 1,699.00, GBP 1,094.72, and EUR 1,270.38 per ounce.


Gold is marginally lower in all currencies today. A myriad of financial and economic risks are supporting the yellow metal at these levels.

Market participants continue to be surprised by gold’s continuing weakness and some are even questioning gold’s safe haven status. However, the fundamentals of broad based global physical demand remain very sound as evidenced by the central bank gold buying data today.

Russia bought 19.5 metric tons of gold in October bringing their total gold reserves to 871.1 tons according to IMF data released today.

Belarus increased holdings by 1 ton, Colombia by 1.2 tons, Kazakhstan by 3.2 tons and Mexico by 0.9 ton, the data show. Germany reduced reserves by 4.7 tons and Tajikistan cut reserves by 0.4 ton, the data show.

Thus, Russia, Kazakhstan, Colombia, Belarus and Mexico added a combined 25.7 metric tons of gold  to reserves in October, after gold prices corrected from record highs.

Cross Currency Rates including Russian Ruble

While 25.7 tonnes is a lot of physical gold in tonnage term (given very small size of the global physical bullion market) , it is very small in fiat currency terms as at current market prices (gold averaged $1,671.25 last month according to Bloomberg) its value is a meager $1.38 billion.

Thus, Russia’s purchase of 19.5 tonnes is valued at a tiny $1.05 billion.

Bloomberg reports that Kazakhstan’s assets increased 3.2 tons to 73.6 tons, Colombia’s gained 1.2 tons to 10.4 tons, Belarus expanded assets by 1 ton to 31.9 tons and Mexico added 0.9 ton to take holdings to 106.3 tons, the data show. Germany cut reserves by 4.7 tons to mint commemorative coins and Tajikistan cut 0.4 ton of gold.

Germany’s gold reserves are at 3,396.3 tons, the IMF data show. The country is the second-biggest holder after the U.S., according to the World Gold Council. A Bundesbank spokesman confirmed the sale German gold and said it was done to mint commemorative coins, which is the only reason it sold bullion during the past few years.
Central banks are expanding reserves for the first time in a generation due to unprecedented monetary and systemic risk.

Purchases may reach 450 tons this year, according to the World Gold Council. Central banks and government institutions officially bought 142 tons last year, IMF data shows.
Astute analysts continue to point out that this is just the officially declared purchases and many central banks and especially the Peoples Bank of China continue to quietly accumulate gold reserves.

Emerging market and or creditor nation central banks have long been diversifying out of U.S. dollars. Now they are equally concerned about the euro and other fiat currencies such as the yen and pound.

Gold in Euros – 1 Year (Daily)

These central banks, including China and Russia, hold huge U.S. dollar and other fx reserves. Even a small shift to gold will have a major effect on its price.

Despite the increase in central bank gold reserves, their central banks still only hold some 5% of their reserves in gold.

This percentage will likely increase significantly in the coming months as they continue to diversify their currency reserves.

Even a small portfolio reserve allocation into gold would create a very large increase in demand for gold.

The Russian government is aggressively adding gold bullion to its gold and foreign currency reserves and their gold buying appears to be accelerating.

This trend may continue to accelerate given the increasing tensions between Russia and the U.S. over Syria, the Middle East. Missile defence in Europe and other geopolitical and economic disagreements.

Yesterday, Russian President Dmitry Medvedev threatened to target and, if necessary, destroy the U.S. missile defence shield in Europe once it is built (see video below).

Russian Prime Minister Vladimir Putin recently accused the United States of living beyond its means "like a parasite" on the global economy and said dollar dominance is a threat to the financial markets.

Medvedev and Putin knows that a prerequisite for strong economy and powerful country is a strong and internationally respected currency and increasing gold reserves helps to protect the Russian currency from any possible economic turbulence or instability.

In 2007, the Head of External Reserves in the management division of Russia's Central Bank, Maria Gueguina argued that holding gold acts as a buffer against political and economic uncertainty.

In June 2004, the Deputy Chairman of the Russian Central Bank, Oleg Mozhaiskov, told a meeting of the London Bullion Market Association in Moscow that western central banks had been rigging the gold market to the detriment of the developing world.

Mozhaiskov said that "although there are only a few reserve currencies, an appalling lack of discipline is demonstrated by the U.S. dollar. As things stand today, the United States is indebted to the external world to the tune of $3 trillion. This sum actually exceeds the total official currency reserves of all the nations of the world -- including the USA. . . The evolution of the reserve role of the American currency in recent years gives grounds for a pretty pessimistic prognosis. The relationship between the state of the dollar and the value of gold is obvious. In relation to our discussion today, this means that gold continues to have particular monetary attraction in the minds of all prudent financial investors. . . .

The internal imperfections of the international monetary system (which I spoke about earlier) have already led to a number of regional financial crises and still carry the danger of larger upheavals. Under these conditions, the growing interest of investors in real assets, gold in particular, is more than justified."

Might Russia and China use gold in order to undermine U.S. political and economic dominance?

There is certainly the possibility that they may use gold as a geopolitical weapon against the U.S. and as a way of furthering their growing global political and economic aspirations.

Putin's endorsement in 2005 of the Russian Central Bank's plans to diversify the Russian reserves out of fiat currencies and debt instruments and into gold bullion was seen by some as as much a political act as an economic one.


Putin's overt and PR like choreographed endorsement of gold was replete with many interesting and highly unusual photos.

It was the first time in recent years that a head of state of one of the larger and more powerful G8 global players has expressly endorsed its central bank buying gold and probably the first time that a head of state has been photographed many times holding and admiring gold bullion bars.

Importantly, it was central bank buying that broke the back of the anti-gold cartel or the London Gold Pool in the late 1960s early 1970s. This paved the way for the massive bull market of the 1970s.

Putin's calculated gesture may have been the most important statement on gold by a head of state since French President de Gaulle praised gold as the ultimate from of money and wealth: "There can be no other criterion, no other standard than gold. Yes, gold which never changes, which can be shaped into ingots, bars, coins, which has no nationality and which is eternally and universally accepted as the unalterable fiduciary value par excellence."

Some have posited that Putin may have been sending a "shot across the bows" of the U.S. government as De Gaulle was doing some 35 years ago. Putin and many in Russia are increasingly nervous and wary of Washington's increasing military and economic presence in what they have always considered their backyard - Eastern Europe, Eurasia and the Caspian.

Russia, like China and other 'strategic competitors' to the U.S. are aware of the predicament which the U.S. finds itself in. While it is the world's remaining superpower and overwhelmingly superior to all its rivals in military terms, it has a dangerously exposed Achilles' heel in the form of its fiat paper reserve currency, over dependence on Middle Eastern oil, its massive indebtedness and balance of payments issues.

Russia, like China, is now one of the U.S.' creditors and thus has considerable leverage which it has so far chosen not to exercise. Should it do so there would obviously be a marked increase in geopolitical tension and the potential to create real instability in capital markets and even an international monetary crisis.

Given continuing currency debasement by the US and other debtor nations, the simmering currency wars of recent months may soon heat up. 


(Bloomberg) -- Biggest Gold Hoard Ever Bolstering Bullish Bets From Traders

(Reuters) -- Gold ticks lower; heads for 2nd straight weekly drop

(Reuters) -- Gold profits from bargain hunters, euro gain

Medvedev: Russia will deploy deterrent to Nato missile shield – Video


(24HGold) -- Adrian Douglas: Central Banks are NOT Ordinary Gold Investors

(Business Insider) -- RICHARD RUSSELL: The Gold Skyrocketing Phase Still Lies Ahead

(ZeroHedge) -- European Bailout Time Of Death: EFSF Cut In Half Due To "Market Conditions"

(ZeroHedge) -- Pictures From A Latvian Bank Run As MF Global Commingling Comes To Town

(The Telegraph) -- Death of a Currency as Eurogeddon Approaches
In Nervous Market, Gold Gains Respectability (When was it disreputable?)

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The Limerick King's picture



Russia is buying up gold???!!!

Don't they know what the sheep have been told?

A traditional stone

That only fools own

That won't keep you warm in the cold


living on the edge's picture

Russia, China and various other countries around the world are moving to gold and our dumbshit monetary leaders talk as if gold is a "barbarous relic".

mayhem_korner's picture



Nothing is more unnerving to our monetary leaders than widespread accumulation of REAL MONEY.  It's the legal equivalent of a mass boycott of tax payments.

living on the edge's picture

I agree. Owning gold is like breaking free of the matrix.

GetZeeGold's picture


Gold is just a fad over a thousand years period. It will soon go away like everything else. :)

Azannoth's picture

Give or take a Millennium

Harlequin001's picture

This is just a fad. Gold flows through markets as it finds its way around the world. It flows from places that have too much gold to those that have too little. In countries that have too much the gold price will fall leading to inflation; in those with too little the gold price will be very high.

When this is all over and we have endured the collapse the next biggest money spinner will undoubtedly be to establish trading contacts between countries to make benefit from these flows as the market settles itself down. After 50 years of having no gold in circulation the potential for benefit is huge, but there is no doubt that the gold flows initially will be in no way linked to market demand for it, which is why countries that collect too much gold are in as much trouble as those that collect too little...

Market forces must decide who needs what and when...

markmotive's picture

Central banks have been a big driving force in the gold market for decades. Ignore them at your own peril.



trav7777's picture

Russia should know; the only thing that bottomed out the old ruble was gold

RBear's picture

That's one very interesting comment, sir (nice picture you have here, btw)! May I ask you what is that particular event you're talking about and what is this 'old rouble', maybe the Soviet one?

runlevel's picture

its discussed quite well in jim rickards new book Currency Wars. im on chapt 7 currently.

WhiteNight123129's picture

Another MillionDollarBonus.... Yeah right a fad. 5,000 years fad and counting.

Assignat introduction in 1789- in France. Hyperinflation

Continental DOllar Fiat in US - Hyperinflation

Greenback introduction in the civil war 0--- hyperinflation

Mark in Weimar with no GOdl --- hyperinflation

US debt destruction of 1932 --- Devaluation of Gold, so GOld gets 75% increase and then you re-invest at 4 times earnings-- sweet.

Of course if you get 6-7 times P/e rediversify we are at 15, so we have some way to go.... 

Gold will suck at some point, I will get out of it when the dividen yield on some comapnies, if adjusted to inflation gets me some nice fat return of 7% and above. Nothing less. We have some way down to go.....

Harlequin001's picture

and perhaps maybe you might want to go and actually read the comment again...

this time in full...

MFL8240's picture

That is because we have none, Clinton an Rubin sold it all.  Another Goldman Sachs gift to the American people.

mrgneiss's picture

I think the Russians should buy GLD instead. ;)

GetZeeGold's picture


Yes....GLD is much lighter.....almost as light as air.

russki standart's picture

It is our dumbshit monetary leaders who are the barbarous relics.

Carlyle Groupie's picture

There once was a blog so pernicious

it had news and pics sooo delicious

readers rejoiced in delight

the fantastical flight

of markets engineered to fail by the joos.

mayhem_korner's picture

+1 imitation (of LK) is flattery

-1 really, really bad miss on amphibrachic meter, dood

Carlyle Groupie's picture

I'm enraged about our current situation so much so I cannot even compete with LK!

And despite all my rage I'm still just a rat in a cage.

JOYFUL's picture

Hey CG

I've asked you now twice*(n I did it real nice)

to stop sowing Hasbara disinfo,

if you do it agin, you won't jus lose some friends,

but also yur cred by the brimfol! {poetic license invoked on the o}



if you so enraged by da situation, why yu gotta spread the sionist lies here?  CatbirdSeat is TelAviv trolldom agitprop.

Hey Mayhem....amphibrachic awesome wordsmithing dood! Thanks ...I never knew that one existed... Crossword heaven!

Carlyle Groupie's picture

Only ghays do crosswords.

Hey check out the photo in this one. LoL!

"The Zionists have a down payment on the White House, and they own Congress free and clear. Zionist sources are said to provide roughly half of the bribe money euphemistically known as “campaign contributions.” They’ve turned the entire US political class into a gang of treasonous whores who daily pledge undying allegiance to the Israeli flag.

So who can stop them? Who can prevent a ruinous war on Iran?

Only the US military."

jekyll island's picture


A trisyllabic metrical foot having one accented or long syllable between two unaccented or short syllables, as in the word remember. [Latin amphibrachys, from Greek amphibrakhus : amphi-, amphi- + brakhus, short; see mregh-u- in Indo-European roots.]'s picture



ZH has a limerick writer,

Whose meter could really be tighter.

Despite his grand plan,

His verses won't scan,

And his spelling of "joos" can't be triter.



GeneMarchbanks's picture

'Some have posited that Putin may have been sending a "shot across the bows" of the U.S. government as De Gaulle was doing some 35 years ago. Putin and many in Russia are increasingly nervous and wary of Washington's increasing military and economic presence in what they have always considered their backyard - Eastern Europe, Eurasia and the Caspian.'

Too bad De Gaulle is gone and now there is... Sark.

jekyll island's picture

I wonder how long it will be until Obama and Timmy label Putin a "financial terrorist" threatening US interests?  That picture is probably more scary to TPTB than Ahmadinejad posing with a nuclear weapon.  

FutureShock's picture

Ok everyone can start blowing each other here now - "Gold Bitchez" and "Keep stacking!" blah blah........I picked up an eagle Wed. :P

Nate H's picture

with so many huge leveraged positions of financial securities worldwide one never knows the reason for any particular strength/weakness, but I would guess the rumor out of europe last night that Germany will agree to jointly back eurobonds but only if countries get down to 3% budget deficits, and also allow voluntary departure from euro, would be highly contractionary/deflationary (some countries would go to great depression x5) is weighing on gold. This is far from the 'printing to infinity is inevitable' trajectory. 

mayhem_korner's picture

Germany will agree to jointly back eurobonds but only if countries get down to 3% budget deficits


That little "only if" clause is the ultimate political sleight-of-hand.  Like when Daffy Duck sells Porky pig a $1 million insurance policy for a black eye...only occurs between 3:55 and 4:00, on the fourth of July, during a hailstorm, by a herd of stampeding elephants in your livingroom...

...and one baby zebra.


(only if)


jekyll island's picture

Please.  Germany will back eurobonds if Italy and Spain, etc. pledge their gold as collateral AND Deutschland is first in line to seize if they fail.  

Silverhog's picture

Next will be videos of Putin bench lifting it.

knukles's picture

And bar bending and coin chewing and    and aa   aaaaaa   and golden showers and   uh    mmmm   rouble rubbing  no    ih  m   ah   teleprompter twiddling   no not that either      Mevendev meddling    mineral mining   yeah mineral mining   gold digging Putin panning  and    uh  have him open the mine next to the nuckleheads on on Gold ah  Gold Rush  yeah, then claim the country back because Sewards check bounced  yeah drama   yeah 
another fucking kinetic action

I'm goin' golfing

cowdiddly's picture

That will be one Dos Pesos for the green fee and cart sir.

margaris's picture

or him playing a 24k golden violin like stradivari.

Carlyle Groupie's picture

Join the bear and crush the Zionist lobby!

Putin, the newest write in candidate for 2012!

MFL8240's picture

I would vote for him over Obama.

Terminus C's picture

As bad as Obama is, you do not want a Russian style government. They are where we are headed, not where we want to go.

Vlad Tepid's picture

We're still not buying gold 'centrally'.  I'd say Russia has evolved beyond where we will be.

Terminus C's picture

I did not claim they are stupid, indeed they are, in large part, the reason for Russia's resurrection as a world power. They understand economics and geopolitical opportuniy. However, theirs is not a model of government I would like to live under. Can you say fascism?

cowdiddly's picture

Ill agree, except pleas look up the meaning of Facism and tell me who is who.

Terminus C's picture

I know the meaning of fascism... The oligarchical control of government that uses coercion and propaganda, rather than the will of the people, to rule. It is often called corpratism because of the inordinate influence of corporate leaders with the government.

Though the Russian system is unique it uses the tools of most authoritarian governments, and, since it allows for private ownership and some economic freedom (mostly for the oligarchical class) it has moved away from it's communist past. It now more closely resembles fascism than any other form of government.

CharlieSDT's picture

And America is not fascism?

trav7777's picture

yeah no shit, I really can't tell much difference these days

VinniPukh's picture

It's not facist. The country is too ethnically diverse to ever hold together under facist rule. Authoritarian Capitalist in everything but name is more like it

jekyll island's picture

Who wouldn't you vote for ahead of Obama?