New Delhi. While countries around the world are buying gold like crazy, Russia has done something that has given the global market sleepless nights. President Vladimir Putin's Russia has suddenly started emptying its treasury. Russia has sold gold worth about 50 thousand kg (ie more than Rs 80 thousand crores).
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After this huge selling, Russia's Gold Reserves have reached the lowest level in 6 years. Now the biggest question is what effect will this action of Russia have on the world? Will the price of gold fall drastically in the international market?
What do Central Bank figures say?
The latest figures of the Central Bank of Russia are very shocking. The Bank of Russia continued to sell gold from its reserves, bringing the amount of gold it held at the end of July to its lowest level in more than six years.
According to the latest data from Trull Bank, from the beginning of the year till August 1, Russia's gold reserves decreased by 1.6 million ounces i.e. about 40,765 kg (a loss of gold worth more than Rs 80 thousand crore in Indian currency) and it remained at 73.2 million ounces (about 22.80 lakh kg). This is the lowest quantity since January 2020.
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Why is Russia emptying its treasury?
The biggest reason behind this is shortage of money. There have been strict global economic sanctions on Russia since the Ukraine War Impact. There has been a huge decline in its energy revenue from oil and gas. In such a situation, to meet the country's expenses and budget deficit, the Russian government is forced to sell foreign currency and gold from its 'National Wellbeing Fund'.
Russia was once the world's largest buyer
You will be surprised to know that Bank of Russia was once the largest government buyer of gold in the world. Russia itself purchased almost all the gold produced from its country's mines. But, in the beginning of 2020, Russia suddenly stopped its purchase. When sanctions were imposed after the attack on Ukraine in February 2022 and Russia could not export its gold, it again started buying a little, but it was never on a large scale.
Will gold prices fall flat now?
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Within just seven months, the value of Russia's gold reserves has declined significantly by $33.7 billion (about Rs 3.21 lakh crore). The way Russia is continuously withdrawing gold from its reserves and dumping it in the market, the supply of gold in the global market may suddenly increase. Experts believe that if Russia continues its selling, there may be a huge fall in gold prices in the coming days, which may have a direct impact on the Indian markets as well.