A worker pours Gold at the AngloGold Ashanti mine at Obuasi, Ghana, October 23, 2003. Reuters file/Luc Gnago
Russia’s central bank, the world’s biggest bullion buyer, will stop domestic gold purchases starting next month.
The central bank didn’t explain the move, only saying that future decisions will depend on the state of financial markets, according to a statement released Monday.
The coronavirus outbreak has upended the global gold market by grounding thousands of flights that deliver the metal to banks and dealers around the world, causing shortages in key markets. While there’s plenty of metal available, it’s not always in the right place.
More gold from Russia could ease the tightness in the market. Suppliers may turn to chartered flights as a way to reach key buyers, said Eduard Rybkin, deputy head of the precious metals division at Lanta Bank in Moscow.
Russia’s relentless gold buying in recent years has been a key pillar of support for the market, putting a floor under prices as investors ditched safe havens and bought riskier, higher-yielding assets.
The country’s monetary gold holdings rose to 73.6 million troy ounces as of the end of last month, according to Bank of Russia data. The stockpile was valued at $119.8 billion.
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