Pravda Reports that Russia Intends to Sell Some of its Gold.
The Central Bank of Russia has added more gold to reserves than any nation over the past two years.
Time to sell?
BRICS countries to invest $500 million in Russian gold deposits in Siberia.
According to Russian news agency Pravda the Russia Treasury is planning to sell some of its gold to close its budget deficit.
Pravda cites Aleksey Vyazovskiy, Vice-President of the Golden Monetary House, as saying “the Finance Ministry is looking for ways on how to replenish revenues.”
Mr. Vyazovskiy also told Pravda that he believed Russia may have difficulty selling its gold due to international sactions, but that if the gold could be sold, the volumes would not influence the markets much.
Russia’s Growing Gold Reserves
The Central Bank of Russia has added more gold to reserves than any country on earth the past two years – 50% more than the People’s Bank of China.
The Russian Central Bank added 208 tons of gold to reserves in 2015 and has added 128 tons through September 30, 2016.
Since 2009, the Russian Central Bank has added approximately 900 tons of gold to reserves.
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Russia is one of the largest gold producers in the world. The Russian Central Bank has been purchasing an increasing amount of its domestic production, effectively turning roubles into gold.
Russia has been buying a greater percentage of its gold mining output as its economy worsens.
Russia’s Foreign Reserves
Russia has 12% of its foreign reserves in gold worth about $55 billion and about $90 billion in US Treasuries.
Overall Russia foreign reserves were $397,743.4 million at September 30, 2016 up from $371,559.1 in January 2016.
Buy Low, Sell High?
Would selling gold reflect smart treasury management? Russia has added a lot of gold at low prices from domestic mines the past few years. Selling it now may be a way of locking in profits.
Who Could Buy Russia’s Gold?.
While sanctions may limit Russia’s options to sell her gold, a willing buyer has already been arranged. Last month we reported that Russia planned to sell Gold to China. Russia’s VTB announced an intention to supply 15-20 tons of gold to China in next 12 months and 80 to 100 tonnes (2.57-3.22 million ounces) of gold to China per year.
Russia to Continue to Invest in Gold Exploration
Earlier this week it was announced that the BRICS (Brazil, Russia, India, China and South Africa) had agreed to invest $500 million in Russian gold deposits in Siberia.
The deal was signed during the BRICS summit that that took place in Goa, India on Oct. 15-16.
The Siberian gold deposits are owned by SUN Gold, Ltd an Indian Mining Group. In August, Russia announced that China intended to buy a 70% interest from SUN Gold.
Does it Make Sense For Russia to Sell Some of its Gold?
Did Prvada plant the story to influence the gold price lower so the Central Bank of Russia could add more gold at lower prices? Who is Aleksey Vyazovskiy, Vice-President of the Golden Monetary House? What is Golden Monetary House? (we could find no description of the entity online)
Why would Pravda publish this story?
What do you think?
During the third week of each month we update the Central Bank of Russia’s gold reserves for the prior month. Subscribe to Smaulgld.com and find out how much gold if any Russia is adding to her reserves or if she is selling.
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Russian gold and reserve data from the Central Bank of the Federation of Russia
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