If for a long time China was the largest holder of gold among all countries, it has ceded its place to Russia. In January, the latter purchased 0.6 million ounces of gold to stock its reserve — the equivalent of 19 tonnes. Since then it holds 1,857 tonnes of the yellow metal, a wealth estimated at $80 billion. Russians can rejoice at this news, as it will solidify their currency.
Furthermore, the government is counting on this asset to protect itself against risks linked to exchange rate fluctuations and sanctions.
Russia owns the largest shares of stocks held in reserve in the USA
As we speak, Russia’s gold reserves are estimated at $454 billion. A value that approaches $500 billion, the country’s ultimate goal. Moreover, it has seen its structure evolve over the past decade. The share of gold alone has quadrupled.
In fact, Russia is pursuing an aggressive policy of buying gold on global markets. As a result, it has managed to overtake China, another major investor that relies solely on this strategic asset.
As for the gold reserves stored in the United States, Russia’s are the largest. In total, the 8,000 tonnes in storage belong to it. Germany, for its part, has accumulated 3,000 tonnes, while Italy and France possess 2,500 tonnes each.
Note that industrialized countries tend to convert nearly 30% of their foreign exchange reserves into gold.
Gold, an unparalleled asset
In economic terms, the yellow metal has no equal. It is the one and only asset that retains all its value, even in a crisis. Hence its status as a safe haven. As a means of protection, countries thus accumulate gold. At the same time, it can generate income. With enough gold in reserve, a country can indeed do without any foreign currency.
As for its role as insurance against sanctions, the Iranian situation confirmed this. When Iran was hit by the harshest sanctions, Tehran continued to sell oil in exchange for gold.
With the price of the metal continuing to rise, the value of gold in Russia’s reserves experienced an increase of 27%. It therefore rose from $60.2 billion to $76.6 billion. On the other hand, buying monetary gold is another alternative to the domestic gold mining industry. Indeed, it should be noted that Russia obtains the yellow metal from its own territory, which produces about 300 tonnes per year. It should be known that two thirds of this production are directly delivered to the Russian central bank.