Turkey, Russia, Kazakhstan, Azerbaijan Buy 30 Tonnes Gold In April 2013

According to the latest report from the IMF, central banks of Turkey, Russia, Kazakhstan and Azerbaijan have increased their gold reserves last month with some 30 tonnes. The latter three have added 75% more gold in April than they did in March.

  • Russia bought 269,000 troy ounces (approximately 8.6 tonnes) bringing its reserves to 31.8 million ounces (approximately 1017 tonnes).
  • Kazakhstan bought 85,000 ounces (approximately 2.7 tonnes) bringing its reserves to 4 million ounces (approximately 128 tonnes).
  • Azerbaijan bought 32,000 troy ounces (approximately 1 tonnes) bringing its reserves to 129,000 ounces (approximately 1 tonnes). The former Soviet country started their gold purchases only in December 2012.
  • Turkey has added 586,000 ounces (approximately 18.8 tonnes) in April 2013. Their official gold reserves stand at 13.73 million ounces, which equals approximately 439 tonnes. Marketwatch notes that “it has begun accepting gold as collateral from commercial banks and analysts said this is the main reason for recent increases rather than purchases.”

To get a feeling with the numbers mentioned in this article, we refer to this article which we wrote earlier this year. In it we show the top gold reserves per country at the beginning of 2013. The 4 countries mentioned above added 30 tonnes which could be compared with the potential sales of 10 tonnes by Cyprus (announced in March). The news about Cyprus caused the gold price to drop. As we have written before, the potential sale of 10 tonnes of gold by Cyprus could not lead to such a price decline given the massive amounts of gold purchases in the East (figures from China are not included in this article but are much higher than Turkey, Russia, Kazakhstan and Azerbaijan combined).

As a general trend, it is clear that central banks in emerging countries are increasing their gold holdings anticipating the debt crisis. We wrote before that the BRICS countries (including Turkey) started an urgent dismantle of the dollar system. In a recent report, they explicitly define objectives like for instance the reduction of the risks of destabilization of currency and equity markets linked to massive cross-border flows of capital, but also the increasing use of national currencies in the trade between BRICS countries.

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