In another attempt at finding a tit-for-tat response to US sanctions, Russia made a power move. The authorities of the country place emphasis on gold as an alternative to the dollar. In this case, the words are confirmed by concrete actions: the central bank is increasing its gold reserves. In July, Russia purchased 29 tons of gold.
In general, since early 2016, Russia’s gold reserves have increased by 37 percent to $76 billion. The sum is impressive, but there are nuances. Over the last few weeks, about $3 billion has been lost due to the fall in the value of the precious metal. However, the dollar at which gold was purchased, significantly increased in price. In cases like this, Russia puts a high priority on principles, rather than profit. The US, like other market participants, was not really up for the challenge. So Russia managed to surprise everyone. But all is fair in the event where the goal is to reduce Russia's dependence on the dollar and vulnerability to US sanctions. Moscow is genuinely concerned that the sanctions may prevent it from selling US Treasury bonds in the future or will not allow Russian banks to use dollars for transaction purposes.
For now, according to the World Gold Council, Russia owns one of the world’s largest gold reserves of 2,170 tons, overtaking China. Meanwhile, the United States holds a lead with 9,000 tons of gold.
