Russia leads global gold purchases to reduce reliance on US dollar

The amount of gold bought by global central banks in 2018 reached the second highest annual total on record, according to the World Gold Council (WGC). The report noted that Russia bought the most gold last year.

The industry research firm said that central banks bought the most gold by volume since 1967. It was the largest amount since former US President Richard Nixon’s decision to end the dollar's peg to bullion in 1971.

According to the WGC, central bank net purchases reached 651.5 metric tons in 2018, 74 percent higher than in the previous year when 375 tons were bought. It has estimated that they now hold nearly 34,000 tons of gold.

“Heightened geopolitical and economic uncertainty throughout the year increasingly drove central banks to diversify their reserves and re-focus their attention on the principal objective of investing in safe and liquid assets,” said the report.

READ MORE: Russia’s gold reserves smash Soviet-era record as part of Moscow's de-dollarization drive

It noted that Russia was leading the way as it looks to reduce reliance on dollar reserves. The Russian central bank (CBR) sold almost all of its US Treasury stock to buy 274.3 tons of gold in 2018, the WGC said.

Other big central bank buyers were Turkey, Kazakhstan, India, Iraq, Poland and Hungary.

Earlier this month, the CBR reported purchasing 8.5 million troy ounces of gold in the period January-November 2018. With its 67.6 million ounces of gold Russia became the world's fifth largest holder behind the US, Germany, France and Italy.

It also said that Russia has cut the share of the US dollar in the country’s foreign reserves to a historic low, transferring nearly $100 billion into the euro, the Japanese yen and the Chinese yuan. The step came as a part of a broader state policy on eliminating reliance on the greenback.

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