Robert Harneis –TDO- (FRANCE) Russia has overtaken China as the fifth-biggest sovereign holder of gold, allowing it to diversify its foreign currency holdings to a background of growing hostility from the U.S. This despite being under constant attack through sanctions by the West in recent years.
The Bank of Russia in January increased its holdings by almost 20 metric tons to 1,857 tons, topping the People’s Bank of China’s reported 1,843 tons. Russia’s gold holdings have risen from a record low of 343.41 Tons in the second quarter of 2000. While Russia has increased its holdings every month since March 2015, China last reported buying gold in October 2016.
The U.S. is still the largest owner of gold, with 8,134 tons, much of it stored in Fort Knox. Although sceptics question whether the total is accurate as no proper audit of the holdings is carried out.
Germany is the second-largest, with 3,374 tons, and the International Monetary Fund owns 2,814 tons. The German problem is that about half of their holdings are still held in the United States in New York. although they have repatriated considerable quantities from there and Paris in recent years.
Apart from Russia and China, Turkey is the only major gold holding country to have bought substantial quantities recently. The country’s total holdings rose from 377.05 tons at the end of 2016 to 525.79 today
Gold offers all countries a degree of independence from the dollar amid the constant risk of financial sanctions from the U.S. and its allies, which in the case of Russia especially could be tightened in future. Much of the country’s gold purchases come from local production — Russia is the world’s third-largest miner of the metal, according to research firm Metals Focus.