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The Russian central bank's gold holdings and the struggling ruble
Statista Data Journalist Katharina Buchholz has recently put together some data on where the Russian central bank's gold is being held.
China was the single-biggest foreign holder of Russian central bank reserves as of June 30, 2021, holding 13.8% of the total of Russia's reserves. The report said that the holdings are a mix of gold and foreign currency and roughly the same share of assets held in Chinese yuan.
The report said Russia itself holds the biggest share of reserves. The main component of Russia's holdings is gold, making up 21.7 percent of the total. With the sanctions against its central bank progressing, this means Russia would likely remain in charge of around one-third of its current $630 billion strong reserves through domestic gold and Chinese yuan.
Recently EU countries, along with the U.K., U.S., and Canada, moved to freeze Russia's assets. According to Statista, around 25 percent of Russia's reserve assets were held in France, Germany, and Austria. The total reserves held in Eurozone stood at about 32%, a significant figure.
The report said that about 21.7% of the total central bank reserves are gold. Read More
Capital Economics sees gold price rising to $2,000 in coming months, but sticks to its bearish year-end target
Safe-haven demand could push gold prices back to $2,000 an ounce in the short term; however, the precious metal faces some difficult challenges through the rest of the year, according to Capital Economics.
In a report published Tuesday, the British research firm said that Russia's invasion of Ukraine could support gold prices in the near term. Yet the firm sees gold falling to $1,600 an ounce by the end of the year.
"Gold has been the pick of the bunch among safe haven, maybe because currencies and the U.S. Treasuries have been more affected by investors' sharp reassessment of the expected speed of the tightening cycle in the U.S. For that reason, gold might continue to be investors' safe haven of choice," said Kieran Tompkins, assistant economist at Capital Economics and the author of the firm's latest gold outlook. Read More
Gold, silver power higher amid keen marketplace anxiety
Gold and silver prices are sharply higher in midday U.S. trading Tuesday, with gold poised to close at a 1.5-year high close. More safe-haven demand amid a very spooked marketplace is featured as the Russia-Ukraine geopolitical situation appears to be deteriorating by the day. April gold futures were last up $35.80 at $1,936.60 and May Comex silver was last up $0.909 at $25.27 an ounce.
Image Source: Kitco News
Technically, April gold futures prices are poised to close at a 1.5-year high close today. Bulls have a solid overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at the February high of $1,976.50. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,850.00. First resistance is seen at $1,950.00 and then at $1,976.50. First support is seen at today’s low of $1,903.00 and then at this week’s low of $1,892.20. Wyckoff's Market Rating: 8.5. Read More
Big moves into safe-havens: gold price, silver price, palladium price surge as markets weigh Russia sanctions, supply fears
Uncertainty created by Russia's assault on Ukraine is triggering a massive move into safe-haven metals as investors weigh the impact of sanctions against Russia.
Fears of supply disruptions, unintended economic consequences, and even more problematic inflation are pushing precious metals prices to new multi-month highs this week while Russia intensifies its attacks on Ukraine.
The marketplace is spooked by Russia's full-scale invasion of Ukraine, with the geopolitical situation looking worse by the day.
"Russian forces continue to bear down on Kyiv despite the crippling sanctions response from the West. Reports suggest a 40-mile-long Russian armored convoy is heading for Kyiv, while Ukraine claims Belarusian troops have also entered the country," said BBH Global Currency Strategy head Win Thin. "Putin is clearly signaling that he is undeterred by the Western sanctions so far, painful as they are for Russia. And so, we are left with our original belief that the Ukraine crisis is far from over and its full impact on the global economy has yet to be determined. That is why markets are back in risk-off mode today." Read More
Is Russia 'panic gold buying'? And is panic-selling about to kick in?
The Bank of Russia said it would be restarting its official gold purchases after a two-year hiatus. But some analysts warn that gold-selling is not that far off as Russia battles sanctions and a plummeting ruble.
On Sunday, Russia’s central bank announced that it would resume its gold purchases from the domestic market as it attempts to establish some financial stability amid a barrage of new sanctions following Moscow’s full-scale invasion of Ukraine.
Russia’s economy is starting to feel very isolated after the West implemented sanctions that penalized Russia’s central bank and excluded several Russian banks from the SWIFT payment system.
In the meantime, gold has rallied in response to Russia’s invasion of Ukraine, with investors fleeing to the safe-haven metal for protection. In February, prices rose $120, with April Comex gold futures last trading at $1,926.40 an ounce. Read More
When the ‘nuclear triggers are dusted off’, own this asset for protection – Randy Smallwood
When it comes to assets to own in times of extreme geopolitical uncertainty in the world, there is only one that acts as the ultimate store of value, and that is gold, said Randy Smallwood, CEO of Wheaton Precious Metals.
Smallwood told Michelle Makori, editor-in-chief of Kitco News on the sidelines of the BMO Global Metals and Mining Conference that markets have so far been rather complacent in regards to the threat of nuclear war.
His comments come as Russian President Putin threatened the West with "consequences greater than any you have faced in history" should any nation intervene with his invasion of Ukraine. Read More
Monthly Gold & Silver review and outlook - February 2022
Gold was firmer in February with the price bouncing back above $1,860 and towards the $1,900 level as appetite for safe-haven assets returned after NATO warned that Russia was continuing to build up its military presence near the border with Ukraine. When Russia did then invade Ukraine towards the end of the month, the gold price jumped above $1,970.
Geopolitical rallies tend not to last unless they manage to push prices to levels where momentum and technical buying kicks in (see chart). Consequently, gold gave back its momentum-based gains but has broken out from within the large symmetrical triangle that has dominated for 11-months.
Image Source: Kinesis
Looking further ahead, the London Bullion Market Association’s forecast survey, which was carried out before Russia’s invasion of Ukraine, predicted prices to be mostly unchanged this year compared to 2021’s average price.
The main drivers, according to the 34 analysts surveyed, will be the Fed’s monetary policy, inflation, and the performance of equity markets. The LBMA survey did not consider geopolitical tension as a major driver, illustrating how a week can be a long time in markets!
Geopolitical tension is certainly gold’s key driver right now and this is supported by healthy fundamentals for the metal with strong jewellery demand from China during Chinese New Year, which was 12% higher than the previous year, according to Heraeus Precious Metals. 2022 is the Year of the Tiger with the World Gold Council suggesting that gold will be a vital asset to protect Chinese investors this year with the nation’s economy facing the dual threat of a slowdown in growth and rising inflation. Read More
Disclaimer: These articles are provided for informational purposes only. They are not offered or intended to be used as legal, tax, investment, financial, or any other advice.
