Russian’s Add Official Gold While China Hides More Gold
Russian’s Add Official Gold While China Hides More Gold by Rory – The Daily Coin
As China has cooled her heals as far as adding more physical gold to their official gold holdings, Russia pushes forward. Another month, another big pile of gold added Russia’s central bank holdings.
Russia added 8.5 tons of gold in June; total now 1,717 tons, highest gold-to-GDP ratio of any major nation (5.6%). Putin sees what’s coming. pic.twitter.com/cBY5ukKhsN
— Jim Rickards (@JamesGRickards) July 23, 2017
While 8.5 tons is down from their norm, which is usually mid-high teens of tonnage per month, it is still pushing them higher in gold holdings.
The interesting part of the China equation is the fact that Russia agreed to sell China upwards of 100 tons per annum beginning last year.
Wether China is going to making jewelry, trinkets or has other ideas we can confirm Russia will be supplying China with a lot of gold in the coming months and years – from Reuters
VTB Bank, Russia’s second-largest lender, said on Tuesday:
* VTB plans to supply 15-20 tonnes of gold to China in the next 12 months;
* VTB plans to continue increasing gold supplies to China, the exact volume of supply is subject to demand in the region;
* In April, VTB said it aimed to supply between 80 and 100 tonnes (2.57-3.22 million troy ounces) of gold to China per year;
* In the second quarter of 2016, VTB dispatched its first batch of gold to China, becoming the first Russian bank to start direct supplies of physical gold to the world’s largest buyer and consumer of the precious metal.
The question I have is why has China not reported one ounce of this gold? This was released in September 2016 and China stopped reporting / adding to their official gold holdings in October 2016!!! hmmmm. Seems a little fishy to me. Where is all this gold being deposited? S.A.F.E. accounts?
If you notice in the report above there was no official amount of “VTB dispatched its first batch of gold to China” for their transaction which occurred several months prior to the official announcement of this agreement. Which means none of this is “official” gold and does not have to be reported to the IMF and does not have to be reported to external organizations like the World Gold Council (WGC) or anyone else.
Has anyone reported on this situation? This is a very covert move by the Russians and Chinese.
Even if we use the first smaller number 15-20 tons over the next 12 months China should have reported at least 1-2 tons per month for the past 9 months – not one ounce has been reported. Another question would be why is Russia selling almost half their annual mine production to China?
Another interesting point, regarding gold holdings, was a report from the WGC in 2016, the latest year available.
In the twelve years of this survey, China more than doubled its gold mine production and rose to the top slot, while South Africa cut its production in half and fell from first to seventh. The United States and Australia held steady in and around the two and three slots over the eleven year period until 2014 when the United States slipped to the number four slot. Russia climbed from number seven in 2006 to number three in 2014. Also noteworthy, Russian in-ground reserves went from 5000 tonnes in 2014 to 8,000 tonnes in 2015.
Mine production and in-ground Reserves
1. China 455 tons
in ground reserves 2,000 tons
2. Australia 270 tons
in ground reserves 9,500 tons
3. Russia 250 tons
in ground reserves 8,000 tons
4. United States 209 tons
in ground reserves 3,000
5. Canada 170 tons
in ground reserves 2,400
6. Peru150 tons
in ground reserves 2,400 tons
7. South Africa140 tons
in ground reserves 6,000 tons
8. Mexico125 tons
in ground reserves 1,400 tons
9. Uzbekistan 100 tons
in ground reserves 1,700 tons
10. Indonesia 100 tons
in ground reserves 3,000 tons
If Russia’s annual mine production, according to the WGC, is approximately 250 tons and the Russian Central Bank acquires approximately 200 tons why is Russia giving up almost 50% of their annual mine production to China when the Russian Central Bank has been acquiring 4/5ths of annual mine production for the past several years? None of this makes sense unless, China and Russia have, privately, agreed to stock pile equal amounts of gold in China for the coming gold backed currency. Otherwise, the move made by Russia is foolish. If you have a better explanation of how this makes sense please share as I would be very interested to hear other observations.
If we look at the larger number that was agreed upon 80 -100 tons per year that would mean China should be adding 6 to 8 tons per month, for the past 9 months, just from Russia – again, not one ounce has been reported by China since October 2016.
Russia is reporting another great month of gold acquisitions and boosting their gold holdings to 1,717 tons keeping them in 7th position globally as far as gold holdings are concerned.
As you can see Russian gold holdings have increased every month since June 2015.
Click Image to Enlarge
Russia has been averaging approximately a 200 ton increase annually for the past several years. If there current pace continues they will surpass China, currently in 6th position, in global gold holdings. If they increase their acquisitions, but that appears unlikely, Russia could pass China, who’s current gold holdings stand at 1,842.6 tons, by years end. Probably not going to happen, but anything’s possible.