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Russia accumulates roughly 150 metric tons of Gold so far this year

Russia has been the world’s largest official-sector gold buyer so far this year, although this could be because the country is having trouble selling metal due to the Ukraine crisis, said HSBC in a snippet.
Russia has accumulated roughly 150 metric tons of gold so far this year, according to news reports quoting the head of the Russian central bank. 
“This implies that the central bank of Russia bought around 35 (tons) of gold from the end of September as International Monetary Fund data shows the central bank purchased 115 (tons) in the first nine months of this year,” said analysts with HSBC. 
“Based on our calculations, the central bank of Russia has been the largest official-sector gold buyer this year, accounting for nearly 65% of all central-bank gold purchased,” they added. 
The central bank says it purchased gold in order to diversify its currency reserves. 
“While the gold purchase by Russia may be interpreted as a positive sign for the yellow metal, we caution that the purchase may be due to the country’s difficulties in selling locally produced gold abroad,” HSBC noted. 
“Earlier in the month, Reuters reported that foreign banks have withheld from purchasing Russian gold following the rise in Eastern European tensions earlier this year, which left the central bank as the primary source to absorb bullion. Also, falling oil prices will likely curtail Russian official sector purchases going forward,” the Bank continued.

“According to official data, energy exports account for 70% of Russia’s foreign-exchange earnings and half of government revenue. Excess foreign reserves – mostly the result of previous high energy prices – allow the central bank to purchase bullion….Weak oil prices will limit forex reserve accumulation and likely crimp gold purchases. There is however a possibility other central banks take advantage of recent low prices and purchase gold,” HSBC concluded.

Source:Scrap Register

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