Russia Boosts Gold Production And Builds Monetary Reserves

  • Posted Monday, August 18, 2014 at 01:26 PM

Los Angeles CA, August 18 (Tangible Investments) - by James O’Dell - Gold and Silver bullion prices were lower on Friday, with Gold easing $8.20 or 0.62 percent to end the week at $1,304.55 an ounce, amid increasing safe-haven demand, as hedge funds raised their bets on Gold for the first time in three weeks, according to the Commodity Futures Trading Commission (CFTC). The price of Silver dipped $0.29 or 1.46 percent to finish the week at $19.59 an ounce, while the Gold/Silver ratio rose to 66.59.

The Russian Federation remains on pace to overtake Australia as the world’s second biggest Gold producer this year behind China, which took the place of India last year as the world's top Gold consumer. In 2013, Russia produced nearly 8 million ounces of Gold, or around 248.5 tons, while Australia mined 8.53 million ounces, or 265.3 tons.

But this year, Russian Gold output jumped 26.6 percent in the first half to 116.7 tons, and if that level of production continues for the second half, Russia's output could total as much as 10.1 million ounces, or 314.6 tons. Because Russia's Gold output typically increases in the second half due to milder weather conditions, it is almost certain to move into second place.

The Moscow times quoted Sergei Kashuba, the head of Russia's Gold miners’ lobby, as saying "They are increasing production to compensate for a Gold price decline." Both China and Russia are holding onto much of their nation's Gold production to build monetary reserves (China is suspected of building its reserves in secret), in hopes of replacing the U.S. dollar as the worlds’ reserve currency.

“The more Gold a country has, the more sovereignty it will have if there’s a cataclysm with the dollar, the euro, the pound or any other reserve currency,” said Russian lawmaker, Evgeny Fedorov.

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