Russia buying gold

Russia buying gold

Russia should increase a share of gold in its state reserves to beef up national security, the First Deputy Chairman of Russia’s Central Bank Sergey Shvetsov said.

"The Bank of Russia and other countries give forecasts based on the current situation, there will always be adjustments. For Russia, it makes sense to raise share of gold reserves, "TASS cited Shvetsov as saying.

Value of gold in Russia’s international reserves managed by the central bank increased to $73.7 billion as of November 1 from $60.2 billion at the beginning of the year, the central bank data showed earlier this week.

The value of gold as a reserve is especially great at the time of sanctions, the advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house, economist Sergey Hestanov, speaking with Vestnik Kavkaza, noted.

"The big plus of gold is independence from political upheavals. So in the present conditions, when the risk of tightening sanctions against Russia has been increasing, the interest of the Russian leadership in using gold as a reserve is also increasing," the expert explained.

In addition, he recalled that Russia and China are the largest producers of gold in the world. "Therefore, the purchase of gold is also an element of state support for gold miners," the advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house noted.

According to Hestanov, cons for using gold as a reserve is lack of interest income. On the contrary, one should spend certain funds for its storage.

The expert said that allowing Russians to invest in gold through individual investment accounts is a sensible initiative, but it will not cause any big practical changes.

Advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house added that economic science can not yet answer the question of what the share of gold reserves a country should have. "Now it is less than 20%," Sergei Hestanov concluded.

The Chairman of the Board of the National Currency Association (NCA), Dmitry Piskulov, in turn, confirmed that gold is not subject to sanctions and therefore beneficial as a reserve in modern Russia.

"This is especially true against the backdrop of rumors about a possible abandonment of the dollar, additional sanctions against Russia, which will mean the impossibility of using the dollar. In this respect, the country should have reliable reserves, partially not in currencies," Dmitry Piskulov added.

He also positively assessed the permission to Russians to invest in gold. "The number of tools is still not very large, and precious metals have always been one of the investment tools in which non-professional investors could invest. I believe that this is a justified proposal, despite the fact that there is a risk of volatility and price changes," the economist concluded.

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