LAWRIE WILLIAMS: Russia’s gold accumulation dips in December but still a full year record
The Russian central bank has announced an increase of around 300,000 ounces (9.33. tonnes) to its total gold reserve in December which is a somewhat lower monthly total than for most months in 2019 - although an identical amount to that reported in March this year and in December last year, so not too much should be read into last month’s smaller accumulation.
However, overall, on an annual basis, Russia has added a record total of around 275 tonnes of gold for the full year and a repeat of this amount for the next couple of years would make it the third biggest national gold holder after the USA and Germany - at least as reported to the IMF. That is if the Chinese reported reserve figure is accurate - we believe the announced figure to the IMF, currently around 1,852 tonnes, substantially understates China’s true gold reserve position and it may in reality already be in excess of Germany’s reported 3,369.7 tonnes.
Be that as it may, Russia is currently adding to its gold reserves at around the same level as its estimated annual new mined gold production. It is the world’s third largest gold producer after China and Australia and may even be closing the gap on the latter. Last year’s estimate of production in both nations was put by consultancy Metals Focus at Australia 289 tonnes and Russia 272 tonnes, but the latter’s production was seen as growing at the higher rate (7.6% in 2017). Certainly the country’s two top tier gold miners (Polyus Gold and Polymetal) are both on the expansion trail, although the latter’s biggest expansion project is in neighbouring Kazakhstan - another nation raising its own gold reserves on a month-by-month basis.
Both Russia and China have suggested that gold is likely to play an important role in any global financial reset which may lie ahead. Certainly in a world economy dominated by enormous levels of national debt revalued gold holdings could well have a key role to play as most consider it money in its purest form.