Russian banks are buying gold for resale in China

20 Oct 2016
Russian banks have sharply increased gold buying. In January-September, reserves of the precious metal in their vaults shot up nearly tripled from 32 to 87 tons, RIA Novosti reported with reference to the credit reporting companies on the Central Bank website. 
The largest increase in absolute terms occurred in July - the gold reserves increased by 18 tons or 41%. In September, an increase amounted 11 tons, or 14%. 
The largest contribution to the growth of gold reserves in the first nine months was made by VTB, its reserves of precious metals increased by 25.6 tons (2.3 times) - up to 45 tons. 
Sberbank is in second place with an increase by 24 tons (4.8 times) - to 30.3 tons. 
FK Otkrytiye closes the top three with growth of 3.2 tons (2.3 times) - to 5.9 tonnes. 
Maxim Osadchy, head of the analytical department of the BKF bank, said that the highest gold price over the past period of this year (1,366 dollars per troy ounce) was achieved in July, after which the gold price fell by nearly $100. “Nevertheless, the Russian state-owned banks continue to buy gold frantically, apparently in anticipation of new sanctions”, said expert. Sberbank, VTB and Otkrytiye seek to settle the sales in China, “it is currently the world's largest final solvent buyer,” told Bloomberg Sergey Kashuba, chairman of the Russian Union of Gold Producers. VTB and the Otkrytiye are already registered on the Shanghai Stock Exchange, Sberbank CIB plans to do so before the end of the year. By the end of the year, Otkrytiye expects to send more than 5 tons to Chinese customers, the bank said in August after its debut on the Shanghai Stock Exchange. VTB announced in April its intention to sell in China up to 100 tons of gold annually, without mentioning the plans for this year. Russia is the second-largest gold mining country, Russian companies produced 290 tons last year. 
Source: RIA/