High purchase of gold is a mystery: Russia could be a possible buyer
Created: 12/22/2022, 12:32 p.m
By: Bona Hyun
The anonymous purchase of almost 400 tons of gold is a mystery.
Russia could be a potential buyer.
(Iconic image) © Arne Dedert/dpa
The anonymous purchase of almost 400 tons of gold is a mystery.
There are assumptions that Russia is an option – by buying its own gold.
Moscow – The purchase of gold in this quarter was higher than it has been for a long time: Western central banks bought almost 400 tons of gold in the third quarter.
This was announced by the World Gold Council (WGC) last week.
For the majority of purchases, it is unclear who actually made them.
Some assumptions suggest that Russia could be a potential buyer - because the country is currently unable to do much with its profits from the oil business due to Western sanctions, writes
kreiszeitung.de
.
High buying of gold raises mysteries - Russia could be one of the buyers
Around 300 tons of the gold purchased went to the account of state central banks, which provide little or hardly any information about their gold reserves - such as from China or Russia.
Henrik Marx, Head of Precious Metals Trading at Heraeus Precious Metals, considers it "obvious that Russia is among the unknown buyers".
Because Russia can do little with the billions in profits from oil exports since the attack on Ukraine.
The funds and foreign exchange of the Russian central bank in western countries were frozen as a sanction measure against Russia.
The aim was to isolate Russia from the world market economy and make it more difficult for Putin to finance military costs.
After the accounts were frozen, Russia found little use for dollars and other foreign exchange.
According to chief economist Thorsten Polleit, the country is therefore interested in exchanging proceeds in these foreign currencies for physical gold, for example, as quickly as possible.
After freezing accounts: will Russia buy gold of its own production?
But is it even possible for Russia to buy gold when foreign accounts are frozen?
Experts suspect that Russia probably bought the gold from its own country for this reason.
According to the
Handelsblatt
, Russia is one of the largest gold producers in the world with 2,300 tons of gold reserves.
Russia's gold stash is also one of the few means by which Putin can fund military costs for the war, former US Governor Angus King told
CNN
.
As a result of western sanctions after the start of the Ukraine war, Russian producers can no longer legally access the important trading location of London, where four-fifths of Russian gold is located.
In addition, Russia is having trouble finding buyers for the gold.
Only India and China are unaffected by western sanctions and could continue importing gold from Russia.
Russia recently denied buying up its own gold production.
300 tons of gold bought anonymously – China is not a buyer
Henrik Marx from Precious Metals also thinks it is possible that other central banks are behind the anonymous purchases out of interest in using gold for diversification and becoming less dependent on the dollar.
However, China as a buyer should be ruled out, explained Carsten Fritsch, precious metals analyst at Commerzbank, to the
Handelsblatt
.
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Because the Chinese central bank People's Bank of China (PBoC) has already published data that prove this.
The data shows that the PBoC bought 32 tons of gold in November, bringing reserves to 1780 tons.
According to the PBoC, these are the first purchases since September 2019. There are suspicions that China may have made the gold purchases public on purpose to show that the country has nothing to do with the anonymous gold buyers.
Despite all the rumours, one thing is clear at the moment: So far there is no evidence that Russia could have bought gold.
