Date: 4 weeks ago   Category: Economy

"Loves bad news": why Russia buys up gold — Rambler News Service


Photo: gold Purchase globallookpress.com by Russia reached a maximum for the last six years in the I quarter 2019, the tabloid Daily Express with reference to data of the World council for gold (WGC) reported. According to the expert interviewed by the newspaper, actions of Russia can be regarded as a bad signal for the international cooperation. Waiting for crisis Increase in demand for gold really can be connected with expectation of macroeconomic cataclysms, the associate professor of the financial markets of a RANEPA Sergey Hestanov told RNS, having noted that "gold is good what loves bad news". However such trend can be explained with one more reason, namely the state support of the gold mining enterprises. "So the trend on increase in reserves of gold is partially connected with the expected deterioration in an environment of world economy and partly is an element of state support of producers. The last point is especially characteristic of Russia and China" — the expert explained. Hestanov noted that now in world economy in general there is moderately negative trend what delay of its growth testifies to. Such situation usually develops before large international crises which "trigger" can be an escalation of trade war between the United States and China in the nearest future, the expert concluded. Protection against dollar the Head of research department of the international broker company BullionVault Adrian Ash said Daily Express that gold buying up by the governments or the Central Bank of various countries "seldom is the good sign for the world and cooperation". According to the expert, thus Moscow hopes to protect the interests from possible crash of world economy as gold often is considered as a security measure from falling of cost of US dollar. Ash also reminded of existence of "golden rule" according to which the owner of considerable volume of this precious metal is allocated with the power. The fact that the gold reserve of the United States is the world's largest is explained by it. According to data of the World council for gold (WGC), the Russian reserves of gold following the results of the I quarter of the current year reached 2,168.3 tons that 19% of the total amount of gold and foreign exchange reserves of Russia equal. As specifies the edition, now Moscow is the largest buyer of gold in the world and the fifth largest holder of a precious metal. Ash added that Moscow should hold purchase of gold at the present level within the next 20 years to reach the American indicators. Reported former estimates at the beginning of May of Bloomberg with reference to WGC about growth of world reserves of gold by 145.5 tons. At the same time Russia, according to the experts, remained to the largest buyers of precious metal in connection with reduction of the investments into a national debt of the USA within dedollarization process. According to experts, in the I quarter 2019 net - gold purchases by the Bank of Russia made 55.3 tons which bypassed on this indicator of the Central Bank of China, Ecuador, Turkey and India. In 2018 Russia got the rivers

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