Marketupdate

Tag: october

  • Russia adds 40 tonnes to gold reserves

    Russia has added over 40 tonnes of gold to it’s reserves in October, according to the latest data released by the Central Bank of Russia. Since 2006, the year in which the country started to accumulate gold, they never added such a great amount of gold as last month. By adding 1.3 million troy ounce (40,43 tonnes), the total gold reserves of the Russian Federation reached 1.583,17 tonnes. Valued against a gold price of $1.265 per troy ounce, this gold hoard equals a market value of $64,43 billion.

    The past ten years Russia has quadrupled it’s gold reserves from less than 400 ton almost 1.600 tonnes. And while the precious metal represented less than 4% of the total reserves, today it is about 16,5% of the total reserves. The shift from foreign exchange reserves to gold is a process which started in 2006, but it gained more speed during the financial crisis of 2008 and the crash of the price of oil in 2014.

    russia-gold-reserves-okt16-english

    Russian gold reserves quadrupled since 2006

    gold-forex-reserves-russia-oct16

    International reserves of Russia

    From currency to gold reserves

    Russia wants to reduce it’s dependency on dollars and therefore it keeps diversifying away to euro’s and gold. Last year Dmitry Tulin, governor of the Central bank of Russia, stated that only gold reserves are a one hundred percent insurance against political and legal risk. This advantage is great enough to overcome the volatility in the price of gold.

    In the first ten months of this year Russia has added 167,73 tonnes of gold to it’s reserves, which equals to little over 200 tonnes on an annual basis. That would be on par with the record gold purchase of 206 tonnes in 2015.

    annual-gold-purchases-russia-oct16

    Annual purchase of gold by Russia since 2006

    Central banks buy gold

    The Central Bank of Russia is the largest gold buyer of all central banks. The country takes the sixth position on the list of countries with the largest gold reserves, behind the United States, Germany, Italy, France and China. Other countries buying lots of gold in the last couple of years are China and Kazachstan.

    Central banks became net buyers of gold in 2010 and are still adding precious metals to their reserves. According to the Official Monetary and Financial Institutions Forum (OMFIF), gold will make a comeback as an important monetary reserve.

    hollandgold-logo

    This article is brought to you by Hollandgold, precious metals dealer in the Netherlands. For more information on buying gold, you can contact them at [email protected] or by phone +31(0)88-4688400.

  • China imported 131,19 tonnes of gold in October

    China increased the import of gold through Hong Kong last month, according to the latest data from the Hong Kong Census and Statistics Department sent to Reuters. The gross gold import in the month of October came in at 147,92 tonnes, of which 131,19 tons remained as net import. China has imported more than 100 tonnes of gold each month in the past six months, way more than in previous years. And while gross imports were lower than the 223,5 tonne record high in March, net imports in October were on par at about 130 tonnes.

    In September gross imports from Hong Kong into China were at 116,3 tonnes and net imports amounted to 109,4 tonnes. The following graph shows that gross imports in the first ten months of 2013 have doubled compared to the same period in 2012. We are still accumulating net import data from last year. When we have those data, we will start publishing the net imports into China. Those figures are closer to the real gold demand from China.

    Gross Chinese gold imports in 2013 and 2012

    Gross Chinese gold imports in 2013 and 2012

    China imports a record amount of gold this year

    In the first ten months of 2013 China has imported a net amount of 957,22 tonnes of gold from Hong Kong. With two months to go it is quite obvious that China will surpass the 1.000 tonne estimate by the World Gold Council. Gross imports for this year stand at 1.262,82 tonnes, double the amount in the same period of last year. Whether net imports increased by the same amount remains to be seen, but the increase in 2013 is by all means very significant.

    The Chinese don’t seem to worry about the biggest decline in goldprice in years. Year to date the price of gold has dropped about 26 to 28 percent in euro’s, dollars and Chinese yuan. The Chinese government is promoting private ownership of gold and we expect the Chinese central bank to be adding gold to their reserves as well.

    Gold imports from Shanghai

    China does not publish data on the total imports of gold, but because most of the precious metal is imported through Hong Kong these data is used as a proxy for the Chinese gold demand. Last week Reuters published an article on direct Chinese gold imports through Shanghai, a growing import channel which was overlooked for a long time. According to research by Reuters, China imported about 133 tonnes of gold via this alternative route. The gold imports through Shanghai are expected to increase even further, because of strong demand for physical gold among the Chinese consumers. According to Philip Klapwijk, analyst at consultancy firm Precious Metals Insight, the increasing gold imports through Shanghai are the result of efforts by the government to promote gold ownership among the Chinese population.

    Gross and net imports of gold into China in 2013

    Gross and net imports of gold into China in 2013