While it is true the Russian central bank has been buying increasing amounts of gold, it is not totally clear what sorts of motivations are behind the buying. Though when one looks at Vladimir Putin’s recent statements, it does become clearer what these might be in order to leverage in an increasingly multi-polar world, moved away from the more dollar-based system.
Forbes thinks it is more likely “a small financial detail, a little wriggle in Russian public policy about precious metals sales.”
As Zero Hedge writes of the purchase:
Russia’s central bank Governor Elvira Nabiullina told the lower house of parliament about the significant Russian gold purchases. She is an economist, head of the Central Bank of Russia and was Vladimir Putin’s economic adviser between May 2012 to June 2013.
This announcement is unusual and to our knowledge has not happened before. The announcement by the Russian central bank governor was likely coordinated with Putin and the Kremlin and designed to signal how Russia views their gold reserves as a potential geopolitical and indeed financial and currency war weapon.
Gold currently constitutes for around 10% of the bank’s gold and forex reserves, she added. Official purchases were about 77 tons in 2013, International Monetary Fund data show.
Russia is using its income from petrodollars so as to diversify her reserves with “massive amounts of gold.”
Russia has been “the largest, most active” gold buyer among central banks. Rhind said “the elephant in the room” is how much gold China buys.
A recent report from the World Gold Council show that many central banks are buying gold.
“I don’t think it’s moving to a de facto gold standard, it’s just simply about diversification,” Rhind said. “In many ways they view it as being not too dissimilar from why anybody would own gold.”
There is gold mined in Russia. So plenty for Russia to purchase from its own producers. Such purchases could be made in secret: