Russia is stockpiling gold as fresh US sanctions loom
Russia is accelerating the rate at which it buys gold as the country continues to move away from traditional asset holdings in response to renewed US sanctions. According to International Monetary Fund data analyzed by Bloomberg, Moscow bought 26.1 tonnes of gold in July. Business Insider reports in its article Russia is stockpiling gold as fresh US sanctions loom that this is the largest single monthly purchase since late 2017 and gives Russia a total of 2,170 tonnes of gold in reserve.
At current prices, those reserves are worth about $83.6 billion. A Russian government website lists the value of the holdings as being worth about $77 billion at the end of July.
As Russia buys gold, it continues to sell US Treasurys. The shift in strategy is believed to be in response to sanctions placed against the state in 2011. According to reports in July, Russia lowered its holdings of US debt from $96.1 billion in March to $48.7 billion in April and then to just $14.9 billion in May.
Moscow sees gold as a "100% guarantee from legal and political risks," Dmitry Tulin, the first deputy governor of Russia's central bank, said when it was first revealed that Russia was selling off US debt.
News of Russia's increase in gold reserves comes less than a day after senior US officials made clear that the Trump administration was ready to impose even harsher sanctions on Moscow if it did not change its behavior.
Christopher Ford, the assistant secretary at the State Department's Bureau Of International Security And Nonproliferation, and Sigal Mandelker, the acting under secretary of terrorism and financial crimes at the Treasury Department, told a Senate banking hearing that the US was preparing plans to impose more economic pain on Russia.