Economic tensions with the US trigger the purchase of gold in Russia and China

Monetary authorities of both powers as well as several countries such as Macedonia, Hungary, Kazakhstan or Turkey have launched the massive purchase of gold as a refuge value

According to the figures released by the World Gold Council (WGC), in the first quarter of the year the world’s central banks were quoting 374.1 tons of this metal, with 93% more compared to last year, which is reflected as the largest increase in history.

According to the 2019 Central Bank Gold Reserves survey, conducted by the WGC, for decades, most of the world’s banks had not reflected such a high increase in the purchase of gold, last year it was recorded that 12% of banks he made use of the purchase of the resource.

If we value these figures with respect to the future, 54% of central banks expect that there will be an increase in reserves over the next 12 months, which would yield positive balance to the world economy because 62% of their central banks bet to gold reserves and thus contribute a buffer of protection against possible payment crises.

Of course, the most active country in recent years has been Russia, thanks to the fourfold increase in gold reserves in the last decade. According to data from the Bloomberg news portal, in 2018 the value of gold deposited in the bunker of its central bank increased by 42%, equivalent to 109.5 billion dollars.

China is not far behind, it has added 74 tons to its reserves in the country so far this year, which brings its total reserves to 1,936.5 tons, due to the authority of the Asian country have reduced their holdings in dollars and in US Treasury bonds, due to the commercial war with the US.

In China and Russia gold grabbing are not alone, Kazakhstan, Hungary, Philippines, Macedonia, Turkey and Poland have also joined the increase in their reserves in recent years. From June 2018 to June 2019, the Central Bank of Poland has added 121 tons of gold, doubling its reserves to 228 tons, placing it as the world’s second largest buyer of gold after Russia.

K.Villarroel

Source: elpais

 

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