Low oil prices helped push the ruble to another record low on Friday. This spate of bad economic news is probably just accelerating an existing trend: Russia’s purchase of gold at an astounding rate, NPR reported.
Russia’s central bank bought more than 130 tons of gold this year.
Joshua Aizenman, professor of economics and international relations at the University of Southern California says with its economy suffering, and the cost of imports skyrocketing, Moscow needs to be seen doing something.
“It makes perfect sense politically for Russia to horde and accumulate more gold,” he says. “And equally importantly, it makes sense to advertise this to the population that … leaders are aware of the need to take care of the reserves and the like.”
What is new is it’s not just Russia snapping up gold. China, India, and many other emerging economies have also been snapping up gold lately, says Ashish Bhatia, a director at the World Gold Council. He says this is a big sea change in the gold market. Bhatia says up until a few years ago, central banks were selling their gold assets.
The day’s biggest mover was Japanese gold bullion, dropping 1.7% to settle at JPY 4,649 ($39.06) per gram on Friday, December 12. After a 0.1% increase, Indian gold bullion finished the day at INR 27,341 ($437.46) per 10 grams. The price of Chinese gold bullion fell 0.1% to CNY 244.04 ($39.41) per gram. The price of US gold bullion remained steady at $1,226 per ounce.
Indian silver prices rose 1.1% to INR 39,735 ($635.76) per kilogram. At CNY 3,660 ($590.98), the price of Chinese silver finished the market day up 0.1% per kilogram. The price of Japanese silver showed little movement last Friday at JPY 649.00 ($5.45) per 10 grams. At $17.05 per ounce, the price of US silver was essentially unchanged.
Japanese platinum bar finished the day down 0.7% to JPY 4,737 ($39.80) per gram. Following two days of rising prices, the price of Chinese platinum bar dropped 0.4% to CNY 263.00 ($42.47) per gram. The price of US platinum bar held steady at $1,236 per ounce.
Japanese palladium bar stayed flat at around JPY 3,107 ($26.11) per gram. The price of US palladium bar steadied at $812.00 per ounce following two-days of increases. The price of Chinese palladium bar flattened at CNY 180.00 ($29.06) after two days of improvement.