Russia increased its gold reserves in July with a volume higher than all other months this year, and continued to buy precious metals to combat US sanctions, noted Bloomberg.
The Russian Central Bank added 26.1 tons of gold to its reserves last month, to 2170 tons, according to data from the International Monetary Fund, collected by Bloomberg. The reserves are estimated at $ 77.4 billion at the end of the month, according to the central bank's website. The last time that Russia bought more gold within a month was November last year.
In April and May, Russia has shrunk its US dollar and bond holdings by around 80% and bought more gold. This leads to speculation that the country is relinquishing US assets to protect itself against the growing risk of harsher sanctions. Gold is "a guarantee of 100 percent against legal and political risks", then the first deputy governor of the central bank, Dmitry Tulin.
"This is a very smart move on Putin," said Jim Ricardes, author and editor of Strategic intelligence. "Russia is in a financial war. They give US dollars and take gold. This isolates them from freezing dollars and penalties. "
Pressure on Russia has increased since the United States tightened its sanctions and British Foreign Secretary Jeremy Hunt has called on the European Union to follow suit in response to the poisoning of a former Russian agent on British soil.
"The Americans are turning the dollar into a weapon and it is absolutely right that Russia wants to diversify its foreign exchange assets," says John Meyer, a partner in SP Angel in London. "Gold is the best liquid investment if you do not want exposure to the dollar."