FT: countries buy gold at record pace, most of all – Russia and China

Central banks are buying gold at rates previously recorded only in 1967, the industry-funded World Gold Council said. According to Financial Times citing analysts, the biggest buyers are Russia and China.

According to the World Gold Council, countries purchased 673 tons of gold, with 400 tons in the third quarter – a record since the publication of quarterly reports in 2000. World Gold Council estimates are higher than official central bank data. This has led to speculation about who bought the gold and for what purpose, the FT notes. This is probably due to the fact that in some countries, including Russia and China, the purchase of gold is not only carried out by central banks. According to the International Monetary Fund and individual central banks, countries purchased 333 tons in nine months.

According to official statistics, the leader is Turkey, which purchased 31 tons, the share of gold in its reserves increased by 29%. In second place is Uzbekistan, in third is Qatar. However, China itself reported that in November it increased its gold reserves for the first time since 2019, purchasing 32 tons worth $1.8 billion. According to the FT, gold miners believe that China almost certainly bought more. According to the executive director of the world’s second largest gold mining company Barrick Gold, Mark Bristow, Beijing has purchased about 200 tons of gold.

Experts suggested that Russia also increased its purchases of gold from its business, which has faced difficulties due to sanctions. It is alleged that Russia produces about 300 tons of gold per year, while the domestic market accounts for about 50 tons. Although, as the FT notes, the head of the Central Bank, Elvira Nabiullina, said earlier that Russia has a sufficient amount of funds in gold and yuan.

Adrian Ash, head of research at BullionVault trading platform, believes that buying up gold is associated with distrust and doubts due to the decision of the United States and its allies to freeze Russia’s reserves.

As the newspaper recalls, in 1967, the last time there was such an active purchase of gold, European central banks bought a large amount of gold in the US, which led to a jump in prices and the collapse of the London gold reserve. It also led to the abandonment of the Bretton Woods system, which pegged the dollar to the precious metal.

Leonid Uvarchev