Russia and China Lead the World in Gold Purchases in 2019
Russia and China Lead the World in Gold Purchases in 2019 by Henry Sanderson for Check Point Asia
TDC Note – Be sure and check out the conversation I will be having with Ken Schortgen on The Gadfly on the topic of Central Bank Gold this Friday May 10!! – click here to check it out!
Editor’s note: Russia’s purchase of 55 tons over the first three months of 2019 amounts to less than 2.3 billion in dollar terms, and China’s 33 tons is less than $1.4 billion. This in my opinion is unfortunately not nearly ambitious enough, but at least China has now joined Moscow in constantly adding gold. Russia holds just under 20% of its reserves in gold, somewhat under $100 billion at the current exchange. Gold makes a much smaller portion of China’s even greater $3 trillion reserves.
The central banks of Russia and China helped drive a 7 per cent increase in global gold demand in the first quarter from a year earlier, according to the World Gold Council, as they continued efforts to trim their exposure to US dollars.
Central banks purchased a total of 145.5 tonnes of gold worth about $6bn, an increase of 68 per cent compared with last year and the strongest first quarter since 2013, the industry-led body said.
Russia was the biggest buyer during the period, adding 55.3 tonnes of the yellow metal to tilt the composition of its reserves away from the US dollar, amid rising tensions with Washington and the prospect of further sanctions.
China added 33 tonnes to its holdings and Ecuador bought gold for the first time since 2014, said the WGC.
“There’s been lots of purchases by emerging market central banks looking to diversify their US dollar exposure, or in the case of Russia there are potential implications for FX reserve management if they become subject to sanction risk,” said Alistair Hewitt, a director at the WGC.
Last year central banks bought more gold than at any time since the end of the gold standard in 1971, led by Russia and Kazakhstan.