In addition to the export demand, Russia’s precious metals refineries reportedly produced 306.9 tons of gold in 2017, some 6.4 percent more than 288.6 tons produced in 2016. 18.4 percent of the gold produced in the country was exported, while the balance of 224 tons of the metal were purchased by the Central Bank of Russia to add to the country’s gold and foreign currency reserves.
The increase in the exports of gold from Russia in 2017 can be attributed to the banks’ decision in the previous year to hold off until gold prices increase. In mid 2016, the spot price reached US$1,360 dollars per ounce, but then plummeted to US$1,200 dollars. With the price fluctuations, banks decided to sell off their reserves in 2017. The Chinese have also been buying up gold reserves, and it is likely a large proportion of the newly mined Russian gold was sold to China.
Russia possesses the world’s largest gold deposits, estimated at some 12,500 tons. With production costs estimated at US$400 per ounce, and today’s price of gold at US$1,328, the industry is proving valuable. Russia and China are also keen on moving away from the US dollar and American credit based financial system, and are starting to move towards a system where the national currencies are at least partially based on real assets. Both are expected to overtake the amount of gold reserves held by the United States within the next decade.
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