Russia Halts Central Bank Gold Purchases

SEATTLE (Scrap Monster):  The Russian central bank announced that it will stop gold purchases in the domestic precious metals market with effect from 1^st April, 2020. Although it didn’t cite any reason for doing so, market participants believe that extreme market volatility has forced the bank to arrive at the decision to suspend gold buying. The bank stated that any further decision on gold purchases will be taken after analysis of financial market situation.

Reportedly, Russia has huge gold reserves and does not intend to add more at this point of time, when prices are at near-record highs. The country’s central bank has been a major gold purchaser, adding to its gold reserves for the past three years. The gold purchases by the bank had totalled 158.1 tons in 2019. The Russian gold holdings are worth nearly $120 million, accounting for almost 20% of the country’s international reserves, sources say.

RELATED STORIES

WGC: Official Gold Holdings Constitute 17% of Total Stocks

IMF: Official Gold Reserves with World Central Banks

Meantime, analysts do not expect the bank to sell its gold any time soon. According to them, the central bank believes that it is not prudent to increase gold’s share in reserves, especially when the size of the reserve is declining.

It must be noted that the consistent gold purchase by Russian central bank has been a major support provider for the market.