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Russian Finance Ministry Plans $4 Billion in Gold Purchases

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EDITOR NOTE: So, what of the news that Russia is adding $4 billion worth of gold purchases to its reserves in July? What else can we say about a hostile country we happen to be sanctioning that has more respect for monetary value than we do? You may ask, “why isn’t the US adding to its gold reserves?” There’s no easy answer to this. But one reason that some experts believe is that America's national debt and unfunded liabilities (Social Security, Medicare, etc.) puts it in the hole of over $100 trillion. If the US government really does have custody of 261 million ounces of gold, it would take a gold price of more than $383,000 an ounce for it to cover its obligations. That would collapse the dollar. So, is the government trapped into not adding more reserves at the current level, having to resort to monetary and fiscal means instead?

Russia’s finance ministry said on Monday it would buy 13.5 billion roubles ($184.25 million) worth of foreign currency a day between July 7 and Aug. 5, an increase in the amount of daily operations from the previous month.

The finance ministry said its regular FX and gold purchases on the market will total 296 billion roubles ($4.04 billion) over the next month. A Reuters survey of analysts predicted that FX buying would total 250 billion roubles.

The ministry did not give details of its gold-buying plan, mentioning the precious metal in the monthly release for the first time on record.

In the previous period, between June 7 and July 6, the ministry had planned to buy the equivalent of 220.9 billion roubles, or 10.5 billion roubles a day.

A recovery in prices for oil, Russia’s key export, has enabled Russia to return to foreign currency purchases this year.

In 2020, Russia was selling FX, which helped to limit losses in the rouble amid a slump in oil prices, the COVID-19 pandemic and geopolitical risks.

Original post from CDE

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