Russia Continues Stocking Up on Gold Under Putin’s Strategy
The comments above & below is an edited and abridged synopsis of an article by Pavel Lisitsyn
The Central Bank of Russia (CBR) is increasing the country’s gold reserves to meet a goal set by President Vladimir Putin to make Russia less vulnerable to geopolitical risks.
As of November, Russia had 1,801 tons of gold that accounted for 17.3% of all reserves. Russia is the sixth-largest gold owner after the US, Germany, Italy, France and China.
Since Putin’s election as president, Russian gold reserves have increased more than 500%.
Buying gold makes a country less vulnerable to geopolitics. After the Crimea referendum in the first quarter of 2014, Russia increased its gold reserves by almost 75%.
“I will not dwell on the geopolitical situation. Every smart person understands the value of gold in ensuring financial and economic security of the country,” the central bank’s First Deputy Chairman Sergey Shvetsov said.
The CBR has more than doubled the pace of gold purchases. In the second quarter of the year, Russia accounted for 38% of all gold purchased by central banks.
“Gold is an asset that is independent of any government, and in effect, given what is usually held in reserves, any Western government,” said Matthew Turner, metals analyst at Macquarie Group. “This might appeal, given that Russia has faced financial sanctions.”