'Magic Wand': Russia Buying Gold at Record Pace, Unlikely to Lose Momentum

from Sputnik News:

Russia has been expanding its gold reserves at a record pace, according to information from the World Gold Council (WGC). Russian business newspaper Kommersant suggests this gold rush will give Russia guarantees against sanctions and economic and geopolitical risks.

In the third quarter of 2017, the Central Bank of Russia bought 63 tons of the precious metal, bringing its gold stockpiles to 1,778.9 tons as of the end of September.

In September only, the regulator added 34.6 tons of bullion to its reserves, in the highest monthly increase since October 2016.

Currently, the Russian Central Bank has been ranked sixth in the world in terms of bullion reserves. The top five are the United States (8,133.5 tons), Germany (3,373.7), Italy (2,451.8 tons), France (2,435.9) and China (1,842.6).

At the same time, according to the WGC, the Russian Central Bank is leading in terms of the pace at which it is stockpiling gold.

According to the Russian business daily Kommersant, by stockpiling bullion, Russian wants to have guarantees amid the tightening of the US Federal Reserve’s policy and amid the growing tensions between Moscow and Washington. Russia also wants to protect its reserves against possible geopolitical risks.

If US sanctions are expanded to block Russia’s assets invested in US Treasuries, gold will be a "magic wand," Andrei Vernikov, senior investment analyst with the asset management company Zerich Capital Management, told Kommersant.

Market analysts also suggest that the Russian Central Bank will continue to expand its gold reserves.

"The regulator will continue to amass gold in its reserves, decreasing the share of US Treasuries," Alexander Losev, CEO of Sputnik Asset Management, told the newspaper.

If the Russian Central Bank continues to buy gold at the same pace Russia is likely to topple China as the world’s fifth-biggest holder of bullion in early 2018, according to Kommersant.

Read More @ SputnikNews.com