Over the past ten years, Russia has ridden on its oil riches to scale the heights of bullion buying—adding 570 tons of gold, or almost a quarter more than China. And over the same period, gold has risen nearly 400 percent worldwide, with central banks around the world pursuing stimulus actions, driving investors to seek safety and stability in the precious metal.
Yesterday, gold for immediate delivery was at $1,657.80/oz, down 0.6 percent, in Moscow. However, gold has had twelve consecutive years of gains, rising 7 percent over 2012, with widespread expectations that it will continue gaining through 2013, possibly hitting $1,825 by the year’s end.
Coincidentally, as Putin’s Russia has led the world for gold buying, more developed nations have been getting rid of their gold. Switzerland has sold 877 tons over the past ten years, France some 589 tons, and Spain, the Netherlands, and Portugal have each disposed of more than 200 tons.
Nevertheless, despite Russia’s appetite for gold, its 958 tons is merely the eighth largest in the world and accounts for 9.5 percent of that nation’s total reserves. In terms of production, though, Russia comes in fourth after China, Australia, and the U.S.—last year, it produced 205 tons of gold.
Putin still has five years to go, and it’s clear that Russia aims to keep buying gold.
Bloomberg sums it up aptly:
“The more gold a country has, the more sovereignty it will have if there’s a cataclysm with the dollar, the euro, the pound or any other reserve currency,” Evgeny Fedorov, a lawmaker for Putin’s United Russia party in the lower house of parliament, said in a telephone interview in Moscow.