Russia "burns" the dollar .. and store imaginary amounts of gold

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Russia "burns" the dollar .. and store imaginary amounts of gold

Editorial date:: 2019/3/30 16:22 • 82 times scheduled

{International: Euphrates News} Russian President Vladimir Putin recently asked to break his country's dependence on the US dollar, which caused a wave of Russian demand for gold in every sense of the word.

In a decade, Russia has quadrupled its gold reserves and 2018 was the most ambitious year of the decade, according to Bloomberg. 
Central bank data show that its gold stockpile rose 1 million ounces in February, the largest since November. 
The data indicate that Russia is making rapid progress in its efforts to diversify away from US assets. 
On the global economic implications of this, analysts who coined the term "abolition of dollarization" expect more countries to come up with a similar philosophy and speculate on what the move might mean to buy dollars compared to other assets, such as gold or the Chinese yuan. 
French President Emmanuel Macaron said in an interview with CNN last November that European companies and entities rely heavily on the US currency, calling it a "sovereign issue."
Some say Moscow will import more gold to guard against geopolitical shocks and the threat of tougher US sanctions as relations between Washington and Moscow continue to deteriorate. 
For the first time, gold purchases exceeded last year's supply of mines, while others argue that Russia's demand for gold is slowing. 
"If domestic purchases of gold reach the maximum, I think the central bank will start importing gold," said Oleg Kuzmin, chief economist at Renaissance Capital in Moscow, a former adviser to the central bank's monetary policy department. "Given the geopolitical risks, The central bank is likely to continue to increase gold's share of reserves. 
A representative of the Russian central bank declined to comment on his purchases of gold.
Among the things that can keep Russia's dollar reserves at a high level is the country's dependence on the export of commodities, such as oil denominated in the US currency, and three quarters of the country's annual trade estimated at 600 billion dollars, is in dollars. 
The central bank's purchases have helped support gold prices in recent years. 
The price of the alloy has risen by 20 percent since the beginning of 2016, with the price of an ounce fell on Saturday morning in London by 0.2 percent to settle at 1288.39 dollars at 8:25 am. Ended