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Russia Stops Gold-Buying Spree After Prices Soared in January

Friday, 20 February 2015 12:42 PM

Russia stopped buying gold for the first time in 10 months after prices had the biggest increase on record.

Gold reserves were unchanged at 38.8 million ounces, or about 1,207 metric tons, as of Feb. 1 from a month earlier, the country’s central bank said on its website Friday. Bullion priced in rubles climbed 35 percent last month, the most in data going back to 2000. In dollar terms, the increase was the biggest in three years.

Higher gold prices “probably helped sway the central bank from adding to existing holdings,” Ole Hansen, the head of commodity strategy at Saxo Bank A/S in Copenhagen, said by e-mail. “They may be price sensitive, just like we have seen with other major buyers in the past.”

Russia, the world’s fifth-biggest holder of gold, has been adding to its hoard even as international sanctions over the Ukrainian conflict and plunging oil prices led to a collapse in the ruble. The purchases were used to diversify foreign reserves and solve issues related to ruble liquidity, central bank Governor Elvira Nabiullina said earlier this month.

Before last month, Russia had made monthly purchases of at least 18 tons since September. The country more than tripled its gold hoard since 2005 and holds the most since at least 1993, International Monetary Fund data show.

Gold climbed 8.4 percent last month in London as policy makers in Europe and Asia signaled more stimulus to battle slowing economic growth and investors speculated that Greece may be forced to quit the euro. Bullion is still 37 percent below a record set in 2011.

The precious metal accounts for about 12 percent of Russia’s total foreign reserves, according to the London-based World Gold Council. That compares with about 70 percent for the U.S. and Germany, the top bullion holders, the data show.

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Russia stopped buying gold for the first time in 10 months after prices had the biggest increase on record.
russia, gold, precious metal, buying
Friday, 20 February 2015 12:42 PM
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