Russia leads global gold purchases to reduce reliance on US dollar

Friday, February 1, 2019
By Paul Martin
1 Feb, 2019

The amount of gold bought by global central banks in 2018 reached the second highest annual total on record, according to the World Gold Council (WGC). The report noted that Russia bought the most gold last year.

The industry research firm said that central banks bought the most gold by volume since 1967. It was the largest amount since former US President Richard Nixon’s decision to end the dollar’s peg to bullion in 1971.

According to the WGC, central bank net purchases reached 651.5 metric tons in 2018, 74 percent higher than in the previous year when 375 tons were bought. It has estimated that they now hold nearly 34,000 tons of gold.

“Heightened geopolitical and economic uncertainty throughout the year increasingly drove central banks to diversify their reserves and re-focus their attention on the principal objective of investing in safe and liquid assets,” said the report.

It noted that Russia was leading the way as it looks to reduce reliance on dollar reserves. The Russian central bank (CBR) sold almost all of its US Treasury stock to buy 274.3 tons of gold in 2018, the WGC said.

Other big central bank buyers were Turkey, Kazakhstan, India, Iraq, Poland and Hungary.

Earlier this month, the CBR reported purchasing 8.5 million troy ounces of gold in the period January-November 2018. With its 67.6 million ounces of gold Russia became the world’s fifth largest holder behind the US, Germany, France and Italy.

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