Russia made the decision to stop adding gold to their central bank balance sheet on April 1. If we use the volume of gold produced in Russia in 2018, 314 tons, we find there is approximately 25+/- tons of gold that will soon be available on the open market. Who will receive this gift at a time when there is so little gold available at the current global benchmark price?
We believe there is more to this decision than what is being reported. Why would Russia make this decision at the exact time when gold is most needed – and not only that why would Russia begin shipping gold to the rest of the world – at the exact time when gold is most needed AT HOME? It doesn’t add up. If Russia continues into the month of May, that will mean another 25+/- tons will be available.
While the Russian nation is considered to be debt free with a national balance sheet that is the envy of the world, this doesn’t change the fact that gold is, literally, money and the world is going to need lots and lots of real money, not fiat currency, in the very near future. As Chris Powell and I discussed in a recent interview, gold is not only on the balance sheets of central banks around the world, it still sets the value of all items around the world – all items of importance, like oil, wheat, corn and other necessities. Gold is tied to them all.
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Which brings us back to our original question – Why would Russia make this decision at the exact time when gold is most needed – and not only that why would Russia begin shipping gold to the rest of the world – at the exact time when gold is most needed AT HOME?
Russian central bank turns attention to banks hit by slower gold exports
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- Central bank suspended gold buying for its reserves on April 1
- Previously was the largest buyer of gold produced in Russia
- Russian banks say gold exports are hit by grounded flights
- Russian govt may grant proper export rights to gold miners soon
MOSCOW: Russia’s central bank is considering how to help the country’s commercial banks with gold storage after complications with bullion exports because of the coronavirus crisis.
Gold exports from the world’s third-largest producer behind China and Australia have been hit by the grounding of passenger flights while domestic demand has been curbed by the central bank’s decision at the start of the month to suspend its gold purchases from banks, a banking lobby group said this week.
“There are difficulties,” the central bank’s governor, Elvira Nabiullina, acknowledged in an online briefing on Friday.
“Banks tell us that it is harder to export gold because of transportation and logistics problems. We are now working with the banks (on the issue), including an opportunity to use vaults,” she said without elaborating.
Some Russian banks hope to have a meeting with the central bank on the gold exports issue next week, two banking sources told Reuters.
The central bank had 73.6 million troy ounces of gold with a value of $120 billion in its reserves as of March 1.
It remains unclear when the central bank would resume gold purchases and why it stopped them. The move had nothing to do with the foreign currency sales – the reason some analysts suggested previously – as the central bank buys gold for roubles, Nabiullina told the briefing.
Russian banks normally buy gold from miners for export or for sale to the central bank.
Russia produced 10.1 million ounces (314 tonnes) of refined gold in 2019, of which 5.1 million ounces were bought by the central bank and 3.7 million ounces were exported.
Planes, trains and automobiles? Seriously?
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At the end of the day we will never know. At the end of the day it will come to light as there is a nation, or several nations, that have just been handed monetary life support and that nation(s) will soon be known through the reporting of their “official gold holdings” changing on a monthly basis.
