The World Gold Council has released a report finding that Russia is continuing its focus on buying gold at practically unheard of scales. The move is linked to a move away from the US dollar by Putin, who is saving making cuts in the budget for purchasing international currency to fund the gold rush. Between April and June this year it accounted for thirty-eight per-cent of all gold purchased by central banks internationally.
Russia Hoarding Gold in Move Away from US Dollar
Compounding this accumulation, the World Gold Council further found that Russia is the planet’s third-greatest producer of gold, with the national reserve purchasing 50% of this domestic gold from the five biggest producers in the nation.
The report found that the Russian reserves constituted ’17 percent of the nation’s wealth’ in what can only be described as a move back to the gold standard. In the past decade, the country has mined over 2000 tons of gold domestically – in addition to their exports – equating to the weight of 33 M1 Abrams tanks. Made of solid gold.
But what is pushing this growth in gold? The report found that the privatization of the nation’s biggest gold mines, in conjunction with streamlined tax arrangement for the sale and purchase of gold have been mostly responsible – in conjunction with a falling faith in the dollar.
What does this mean?
If diamonds are a girl’s best friend, then gold is certainly Putin’s pal. What the impacts of this stockpiling will be, who knows. However, any purchasing of gold at this scale should be something to keep an eye on as more nations move toward decoupling money and its state-held ‘material’ guarantee.