Russia overtook China, ranked fifth in the world after gold reserves, as Western sanctions pushed its central bank to make record purchases in 2018, according to official data.
In the past year, Russia's gold purchases have increased significantly due to the reduction in US bond holdings after Washington imposed new sanctions against Russian entities in April, Agerpres.
The Russian central bank announced today that it had purchased 8.8 million ounces of gold in the past year, exceeding 7.2 million ounces of precious metal in 2017.
On January 1, 2019, the Central Bank of Russia held 67.9 million ounces of gold, rising from 59.1 million at the beginning of 2018. Therefore, Russia is fifth in the world after the gold reserves, being surpassed only by the USA, Germany, France and Italy.
China fell to sixth place, with 59.6 million ounces of gold in December 2018, from 59.2 million in October 2016.
"Purchases of gold to diversify holdings as a result of cuts in US bond purchases ", an official of a Russian gold producer told Reuters, referring to the massive gold reserves of the Russian bank.
Russia, the world's third largest producer of gold, has increased its production by 6% in 2017 and a 3% increase is expected in 2018. According to the latest data from the Moscow Ministry of Finance, between January and October 2018, the Russia produced 8.5 million ounces of gold (265 tons).
it is extremely attractive for central banks looking for safe assets. In the third quarter of last year, central bank gold purchases grew by 22%, the highest growth in 2015, says Natalie Dempster, CEO of central banks and public policy at the World Council of the Gold.
In recent years, the largest purchases of gold have been made by Russia, Turkey and Kazakhstan. And now it buys large quantities of gold, but countries like India, Poland and Hungary have started buying aggressive gold in recent months.
European countries are buying solid gold
The Central Bank of Hungary (NBH) announced in November that it has increased its gold reserves ten times in line with the long-term strategic objectives of the national strategy. The acquisition of gold comes after the monetary authorities in Hungary decided to repatriate the gold reserves in March of this year.
Hungary is the last example of a country in the European Union that buys gold. In July and August, Poland increased its gold reserves by about nine tons, this being the largest gold acquisition made by the state since 1998, and at the same time one of the largest acquisitions ever made by a member country of the European Union.
NBH said it had increased its gold reserves from 3.1 to 31.5 tons, an unprecedented level for Hungary over the past 70 years. As a result of these acquisitions, gold currently holds a 4.4% share of Hungary's reserves, a level similar to the average in the region, according to a press release issued on Tuesday on the NBH website.
Despite the huge acquisitions of gold made in the last few years by Hungary, the neighboring country is a relatively small owner of gold, not among the top 50 countries in the world according to the World Council of the Gold.
For example, the United States, which has the largest world reserve, holds about 8,133 tons of gold and Romania has a reserve of about 104 tons of gold.