Each month, Russia continues to increase its reserves of gold, as it added almost 340,000 troy ounces in July, the IMF reported this week. The total gold estimated in Russia’s Central Bank reserves now totals more than 35.5 million ounces.
The country also added 16.8 tonnes of the precious metal in the month of June and is the 6th largest bullion holder in the world behind the United States, Germany, Italy, China, and France.
Kazakhstan also increased its gold holdings by 45,000 troy ounces last month, with reserves now totaling more than 5.1 million ounces.
The World Gold Council reports that over the past six months, Russia has increased its gold holdings by purchasing 54 tonnes. During that time, Kazakhstan increased its reserve by 12 tonnes.
Russia’s continued accumulation of gold has many analysts believing that the country is undergoing a reserve diversification strategy to reduce the impact of sanctions imposed by western countries and the weakening dollar.
Since the Bretton Woods Conference in 1944, the U.S. Dollar has been the world’s reserve currency for international transactions. And until 1971, the dollar was backed by gold. But after President Nixon abolished the gold standard in favor of the petrodollar, the dollar has been, by definition, a fiat currency, with its value determined solely by the United States’ perceived ability to repay its debts. As the country spirals into deeper and deeper debt, the likelihood of repayment becomes increasingly unlikely.
This has led to many economic and political rivals of the United States making moves to reduce their dependence on the dollar.
Central Banks hold gold as one of their reserve assets along with dollars and Euros. Gold currently accounts for around 12% of Russia’s currency reserves and in just the past 5 years, Russia has DOUBLED its gold holdings.
China has not reported the amount of gold they hold in reserve since 2009, but many analysts believe the country has doubled or possibly tripled its reserves as well.