It’s no secret that many central banks have been buying gold in recent years. This trend of central bank buying does not appear to be slowing down at all either, in fact, it appears to be accelerating. These financial mega- institutions have been adding physical gold bullion to their reserves not only for its inherent value but also for diversification as uncertainty surrounding global currency markets increases.
In a recent Kitco News article, Elvira Nabiullina, who is chairwoman of the Russian Central Bank, is said to have stated that the country plans to increase its reserves from the current level of $357 billion to $500 billion in the coming years.
According to the World Gold Council, Russia already led central bank gold buying last year with purchases of 173 tons. That trend seems likely to continue.
Russia has seen its economy suffer and the value of the ruble slide in dramatic fashion as ongoing economic sanctions and lower energy prices (Russia’s economy is highly dependent on their energy exports) take their toll. Given the economic difficulties experienced by the country, it does beg the question-why is Russia so intent on beefing up its bullion holdings?
Obviously, there could be numerous reasons for this strategy. According to a World Gold Council report, Russia’s appetite for gold has been “driven by a number of factors including a continued diversification away from the U.S. dollar and the backdrop of ongoing geopolitical tensions.”
Hmm….Continued diversification away from the U.S. dollar….
Russia’s desire for gold seems to be indicative of the continuing trend away from the dollar and into gold and other currencies.
The country has also already established various swap lines to conduct business outside of the dollar-and other countries are doing the same.
The country clearly acknowledges the strategic importance of gold as a major portion of its reserves. In fact, gold has likely served as a vitally important hedge for Russia’s reserves in the face of a declining ruble and euro.
Some analysts believe Russia is buying gold in order to try to protect itself from further economic sanctions. Others believe that the country is accumulating gold as part of a plan with ex-Soviet states.
Russia maintains close economic ties with Kazakhstan and Belarus. Some type of eventual economic union between these states cannot be ruled out. The recent buying in gold may provide a means to that end, and may be a common effort in a gold accumulation strategy.
Whatever the case may be, Russia’s appetite for gold only serves to demonstrate its economic importance…
Russia is only one of several major world powers that have been diversifying away from the dollar. Russia, China and even France have been moving away from the U.S. currency in a global trend that is set to continue.
As the move away from the dollar accelerates, it may lead to a number of serious economic consequences.
A depreciating dollar causes wealth destruction and a decline in purchasing power. These central banks recognize the harm that a significantly depreciating currency can inflict.
Isn’t it time you considered what a falling dollar would do to your wealth?
Like it or not, the move away from dollars is well under way. Within time, the dollar will depreciate further and with it so will billions of dollars in wealth…
These central banks are the most powerful financial institutions on earth; shouldn’t we be following their lead?
The writing is on the wall. The global financial landscape is in the midst of great change. Don’t wait until the value of your assets erodes further.
Now is the time to be proactive to protect your holdings-before it’s too late.
Hard assets such as gold, silver and other precious metals may provide a vehicle with which to protect your wealth and purchasing power.
These metals are recognized and coveted for their stability and inherent value. History has shown their effectiveness in protecting wealth and acting as a store of value.
Now is the time to consider an allocation in precious metals…
One of the most convenient ways to acquire gold or silver is with a precious metals IRA account.
Don’t wait until your dollars have lost more value. Consider an allocation in precious metals today.
To learn more about precious metals and how they may benefit your portfolio, speak with an Advantage Gold specialist today. It has never been easier to invest in physical precious metals than it is today, and our specialists will guide you through the process step by step.Tags: russia continues buying gold, russia gold