Russian banks ramping up gold purchases at record pace

from RT:

The Russian government has purchased two-thirds of all the gold mined in country, buying it from local banks to add to reserves as the Kremlin sees the precious metal as a safe haven at a time of geopolitical turbulence.

“For banks, this is good business. They credit mining companies, which return the loan with the gold they extracted. Then banks sell it to the Central Bank,” according to the Russian Finance Ministry, quoted by Prime news agency.

Russia is the largest gold buyer in the world, and purchases by Russian banks have increased substantially in recent years.

Last year, Russian banks bought 205,155 tons of gold, which is 4.7 percent more than in 2016 (195.89 tons), and approximately 67 percent of all gold produced in Russia. This is also a 13 percent increase compared to 2013.

The biggest buyers are VTB24, Sberbank and Gazprombank. All three banks have registered at the Shanghai precious metals exchange. In April, VTB announced plans to sell up to 100 tons of gold to China annually.

According to the World Gold Council, the Russian Central Bank increased gold reserves by 163 tons, to 1,778 tons. Russia has almost caught up with China, which holds the fifth biggest gold reserves of 1,842 tons.

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