For years now Russia has been buying gold as they proceed with diversifying their foreign currency reserves away from the U.S. Dollar. In October and November of 2015 Russian buying of the barbarous relic hit record levels. However, the Russian Central Bank reversed course and bought zero ounces of the precious metal.
There are multiple theories as to why. Perhaps they were buying gold in anticipation of a Hillary Clinton win and a further deterioration of America’s finances and an eventual devaluation of the dollar. Perhaps they were buying gold in order to put the ruble on the gold standard as some have theorized. Or perhaps, they were buying gold simply to get away from fiat currency risk as the world burned.
Seeking Alpha reports, “This week we also saw the release of Russia’s most recent gold holdings data. It showed the Russian central bank’s lack of gold purchases during the month of December, which is the first month since early 2015 where it did not make any gold purchases. After two strong months of Russian gold purchases, it may be the central bank has hit its desired gold purchase target for 2016. Or maybe the Russian government has decided to take a wait-and-see approach with the new US administration, and if US-Russian relations warm-up, then the central bank has less incentive to diversify away from the US Dollar. It is still too early to tell though.”