The Bank of Russia has announced its plans to start purchasing gold after two years of refraining from purchasing bullion. The announcement follows from the sanctions imposed on the Russian central bank and several commercial banks as a result of the Russo-Ukrainian War. Said sanctions have caused gold prices to fluctuate wildly as investors turned to gold bullion, resulting in a 5% increase since the start of February 2022.
The Bank of Russia ‘relentlessly accumulated gold over the last decade’ from 2010 to 2020, doubling its holdings and becoming the biggest sovereign purchaser of gold bullion. Its purchases helped to increase and support the price of gold over the last ten years as institutional and individual investors focused their investment efforts elsewhere.
The World Gold Council noted that central banks purchased 463 tonnes of gold in 2021, an increase of more than 80% compared to 2020. The demand from Asian jewellery consumers has also propped up the market. The International Monetary Fund stated that Russia had more than 2,000 tons of Gold at the end of December 2021, accounting for slightly over 20% of its reserves and ranking the country as the fifth-biggest sovereign gold holder in the world.
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