An interesting article in the SMH regarding countries turning away from the US dollar and buying gold reserves.
In part it says...(but read the full article for balance)
"
Should it reach the limit for domestic purchases, I think the central bank will start to import gold," said Oleg Kouzmin, chief economist at Renaissance Capital in Moscow and former adviser in the central bank's Monetary Policy Department.
Given the geopolitical risks, it's likely the central bank will keep increasing gold's share of reserves, he said.
A representative for Russia's central bank declined to comment on its gold purchases.
One thing that could keep Russia's dollar reserves at high level is the country's dependence on exporting commodities, like oil which are denominated in the greenback. Three-quarters of the nation's annual $US600 billion ($847 billion) of trade is in US dollars.
Central bank buying has helped "strengthen gold from a weak hand to a strong hand" and supported gold prices in recent years, according to Ronald-Peter Stoeferle, managing partner at Liechtenstein-based asset manager Incrementum.
Bullion has risen more than 20 per cent since the start of 2016. It traded up 0.5 per cent at $US1,297.15 per ounce on Friday in London.
AUL Price at posting:
0.5¢ Sentiment: Buy Disclosure: Held
