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ARUN Minerals Optimistic As Russia’s Massive Gold Purchases draw To A Close

Press Release Date: February 20, 2014


The ten month long Russian gold bullion buying spree has drawn to a close as precious metals prices rise to their highest point in nearly three years.

Russia has now curtailed its gold bullion purchases for the first time since it began its massive buying spree some 10 months ago, following the biggest increase in precious metals prices in 36 months. The country’s bullion reserves as of the 1st of February remain little changed those at the beginning of January this year at a figure of 38.8 million ounces, approximately 1,207 metric tons according to data posted on the website of Russia’s central bank on Friday. The price in rubles for gold bullion increased dramatically by 35% last month, the greatest since 2000, while in dollar terms, the move was the largest in three years.

Russia which is the world’s fifth-largest gold bullion holder, has been heavily active in increasing its holdings even further as mounting pressure from international sanctions in response to the ongoing conflict in the Ukraine, as well as falling prices of oil and natural gas triggered a large decline in that country’s currency. The series of large scale bullion purchases were intended to assist in diversifying the country’s foreign reserves, as well as addressing the ruble’s liquidity according to the Governor of Russia’s Central Bank ‘Elvira Nabiullina’. Prior to January, bullion purchases of at least 18 tons had been made on a monthly basis, dating back to September. Russia has since 2005 more than tripled its gold reserves, with the country now holding its greatest amount of gold since 1993 according to figures from the International Monetary Fund.

January saw the price of gold increase by 8.4% in London trading, as European and Asian policy makers showed their intentions of providing continued and increased stimulus support to tackle the slowdown in economic growth. Further focus was placed on the precious metal as analysts and investors speculated on Greece’s possible forced departure from the euro. Even with such marked gains in prices, gold still remains nearly 37% below its record price set back in 2011 giving many analysts comfort in predicting further price increases over the course of 2015.

Speaking in regards to the end of Russia’s buying spree, as well as future trends for the metal’s price this year, ARUN Minerals Chief Executive Officer Mr. Han Liu Wei had the following to say; “This end to Russia’s strategic increase of its bullion levels will in our opinion bring about a resurgence in smaller buyers, whose confidence in the metals value has been systematically restored by witnessing the large scale purchases by countries’, central banks and funds. Given that prices are still way below their record 2011 levels, there is extraordinary leeway for further gains and limited profit taking, to occur this year as demand is expected to remain high with a number of countries now looking to increase their own holdings, ahead of projected increases in costs.”

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