Russia gold reserves up 20.7 tns as rouble woes continue

Otmane El Rhazi from The Bullion Desk.

Russia’s central bank lifted its gold holdings by 20.7 tonnes, according to the latest monthly report from the World Gold Council.

Its total gold reserves now stand at 1,208.20 tonnes, accounting for 12.2 percent of its total reserves, sustaining Russia’s position as the sixth-largest holder of the yellow metal in the world, WGC figures show.

Russia added 113.5 tonnes to overall reserves in the second half of 2014 after adding 59.6 tonnes in the first half, the WGC figures also show, for an annual total of 173.1 tonnes.

According to GFMS estimates released last week, Russia bought more gold in 2014 than in any year since at least the break-up of the Soviet Union.

GFMS estimates that Russia acquired 152 tonnes in the first 11 months of last year – purchases after April averaged almost 20 tonnes per month, it said in its Gold Survey 2014.

The inflow of gold coincides with a consistent decline in the rouble, which hit an all-time low in December at 79.52 against the dollar, as the price of oil and Western sanctions battered the Russian economy. The Russian currency has since recovered to 66.3 after several interventions by the country’s central bank to stem losses.

The slump in oil prices to around $50 per barrel from nearer $110 at the start of the year has weighed in particular – western sanctions have deliberately targeted the oil and gas industries, which account for upwards of 40 percent of the Russian government’s income.

Kazakhstan, which consistently added to reserves throughout 2014, added a further 4.2 tonnes to reserves, bringing overall net purchases for the year to 48.1 tonnes.

Belarus added 1.3 tonnes to 42.4 tonnes, the Philippines added 0.1 tonnes to 195.1 tonnes and Serbia added 0.1 tonnes to 17.5 tonnes.

Malaysia added 0.3 tonnes to 35.8 tonnes.

Elsewhere, Turkey’s holdings dropped 3.9 tonnes to 529.1 tonnes after adding a net 9.4 tonnes to total reserves over the course of the year – although its balance sheet includes gold accepted by the central bank from commercial banks in lieu of reserve requirements.

Tajikistan holdings are down one tonne to 8.6 tonnes while those of Mexico dropped 0.1 tonnes to 122.7 tonnes and Mongolian holdings were down 0.5 tonnes to 2.9 tonnes.

Mozambique holdings dropped one tonne to 5.4 tonnes, while Sri Lankan reserves dropped 0.6 tonnes to 22.5 tonnes.

(Editing by Mark Shaw)

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