What Russia Knows About Gold That You Don’t
Sometimes, you’ve got to look past the headlines to see the real story.
Overnight, the gold price fell US$10 per ounce, on the back of the release of the Federal Open Market Committee (FOMC) minutes. In the minutes, the Fed say it expects inflation will continue to creep up. These minutes also confirm a March rate hike in the eyes of the market.
Of course, between now and 21 March — when the Fed next meets — may be your last chance to get in before the next gold bull market run really starts to run. If Jim’s analysis is right, investors now have less than thirty days to buy gold at these prices. By the end of the year, we may never again see gold below US$1,400.
This is something Russia knows too.
The real news overnight is that Russia’s gold reserves are now bigger than China’s ‘official’ holdings.
The Central Bank of the Russian Federation bought 20 tonnes of the yellow stuff in January this year, giving the Russians a total of 1,857 tonnes of gold. This puts the former soviet country 15 tonnes ahead of China’s dubious tally of 1,843 tonnes.
Of course, no one actually believes China’s gold holdings tally. The middle kingdom mines 450 tonnes of the stuff each year. And none of it leaves the country.
But Russia’s incredible accumulation of gold can’t be ignored.
Under President Vladimir Putin’s authority, Russia’s foreign gold stores have soared 70% since 2015.
The three-year gold-buying spree means the country now has 17% of its foreign reserve assets in gold. This far outweighs China, which has only 2% of its foreign reserve assets in gold.
Don’t underestimate Russia’s move here. The country is increasing its gold holdings in a deliberate effort to reduce reliance on the US dollar.
At the same, Russia is setting itself up to take advantage of the next gold bull market. You should too.