MOSCOW – In recent years Russia has been accumulating its gold reserves amid the de-dollarization strategy, and this strategy has worked well in light of rising precious metal prices, writes the German newspaper Handelsblatt.
According to the edition, the policies of low interest rates, as well as the global crises, lead to the increase of gold prices.
In recent years, the Central Bank of Russia has actively accumulated its gold reserves to reduce the share of the dollar in the country’s international reserves. According to the World Gold Council (WGC), since 2015 the Russian Central Bank has bought more than 200 tonnes of gold annually.
The newspaper underlines that, thanks to soaring gold prices, the value of Russia’s 2,000-tonne gold reserves has increased by one billion dollars.
This week the gold price reached $1,430 per ounce – the highest price in six years. Since the beginning of June the price of precious metal increased by 11%. According to Handelsblatt, this increase was prompted by statements by the European Central Bank and the Fed on their plans to adopt a more flexible monetary policy.
This trend is accompanied by the weakening of the US dollar, which devalued in relation to a number of other currencies amid the expectation of lowering the interest rate.
Both phenomena are interconnected: as the price of gold is denominated in dollars, when the US currency falls, gold becomes cheaper for those who buy it in other currencies and therefore demand may increase.
Experts underline that the price of gold will continue to rise in the near future. In addition to increasing international demand, amid the instability and unpredictability of the financial and geopolitical situation, one more factor that will contribute to the increase in the price of the precise metal is the beginning of the fall in its production in the coming years, reaching in 2022 the level of the beginning of the last century.