Russia Bolsters Its Gold Reserves

There seems no end to Russia’s appearance in the headlines recently. They’ve allegedly hacked the Democratic campaign computers; a World Anti-Doping Agency report has accused them of running a state-sponsored sports doping program, causing a hundred Russian athletes to be barred from the Rio de Janeiro Olympic Games; and on Wednesday, July 27, 2016, the landing gear of a United States observation flight failed to work, so the plane had to make an emergency landing in Western Siberia.
 
Suddenly added to this international attention is the Russian Central Bank’s announcement that its gold reserves now total 48.2 million troy ounces (approximately 1,500 metric tons). This amount now includes the 600,000 ounces the central bank added in June.
 
Russia has remained the leader of the world’s central banks in the purchase of gold. In fact, over the last two years, Russia has been more aggressive than China in its gold purchases. One year ago, its reserves stood at $350 billion. As of May of 2016, its reserves total $390 billion. The nation’s stated goal is to bolster its gold reserves to $500 billion. Officially, Russia now has the sixth largest gold reserves among nations.
 
It’s hard to ignore the fact that its status as a nation with plentiful gold reserves will fortify its economic power, thus comes enhanced political power and influence.
Also, by purchasing this much gold, Russia is attempting to lessen its dependency on its domestic currency, the ruble. Even after U.S. economic sanctions, the nation re-purchased U.S. Treasury securities, bringing its total holdings to $88.2 billion. So now, both gold and the U.S. dollar represent strong hedges against the ruble. Additionally, the country has the world’s third largest gold-mining output.
 
There’s a lesson in all this for private investors. You can load your retirement funds with dollars but the central banks of the world have a better idea. They buy gold. Central bankers know that fiat currency – even the almighty dollar – has a shelf life, whereas gold is a hard asset that maintains perennial value. As gold continues to move up in price, Russia will find it much easier to reach its goal of holding reserves of the shiny metal that total $500 billion. Now ask yourself where your portfolio could be if you invest in physical gold, at a price of $1,349 per ounce (as of July 29, 2016), and the shiny metal moves up only to $1,500 per ounce by the end of 2016.
 
For more information, call 800-777-6177 now, and ask to speak to a Fortress Gold Group representative.

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