Friday, November 20, 2015

Russia Selling US Treasury Securities and Buying Gold

Today, the Central Bank of the Russian Federation issued its official October 2015 reserves and other foreign currency assets report. The report indicated that Russian gold reserves increased by 600,000 ounces from its September 2015 report to 44.1 million ounces.
Russian Central Bank Gold reserves

Russia added 600,000 ounces of gold to its reserves in October 2015.

Since 2009 Russia has added more than 763 tons of gold to its reserves more than China who added (668 tons) during the same time period.

Russian Monthly Gold Purchases June 2014 – September 2015

Russian Central Bank gold reserves monthy additions

Russia has added 8.3 million ounces to its reserves from September 2014 through October 2015.

Russian Central Bank Gold Reserves
Russia’s massive additions to its gold reserves come at a time when they are seeing their biggest decline in wages and retail sales since 1999.
Russia’s top central banker Elvira Nabiullina said recently “Regarding gold and foreign currency reserves, we have the desired benchmark of $500 bln, and not in the three-year term, it could be 5-7 years and more. We believe it is necessary in terms of creating additional financial cushion for the state in the face of such external uncertainties.”
Russia has been rebalancing its foreign reserves to favor gold vs. U.S. Treasury Bonds. Russia’s gold buying binge had coincided with a steady sell off of her U.S. Treasuries.
Last month Russia President Vladimir Putin noted “All this gives grounds to believe that the situation in the Russian economy will be stable and, despite the well-known decline in domestic demand, we will work hard to make it rise and become an essential factor in ensuring high rates of economic development,” adding “Russia’s economy will maintain a good development potential.”
It might be expected that as Russia increases its foreign reserves it would do so at least in proportion with that of its current gold reserves.
In September 2015, Russia added 1,100,000 ounces of gold to its reserves while shedding $800 million of U.S. Treasuries.

Russian U.S. Treasury Holdings

Russia’s U.S. Treasury Bond Holdings January 2014-September 2015

Russian Central Bank US Treasury holdings chart

Russia shed $800 million in U.S. Treasuries in September 2015 after increasing its US Treasury reserves four months in a row.

The above originally appeared at

1 comment:

  1. I don't know why people want the bonds of the most indebted welfare state on earth.