Russia doubles gold and yuan holding limits of the National Wealth Fund | Kitco News

Source: Russia doubles gold and yuan holding limits of the National Wealth Fund | Kitco News

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KW: In the middle of a war (!) Russia doubles down on gold and Yuan Holdings despite all the BBC crap about how much the war is affecting the Russian economy and is detrimetal to te war effort. The BBC is simply a propaganda outfit

When the war in Ukraine started last February, gold comprised 20% of the entire Russian reserve position. That gold gave Russia solid backing for its currency and helped it survive Western sanctions. Now, Russia will allow the share of gold to rise to 40% (and increase its holdings of Chinese yuan).

For investors, this basically creates a floor under the gold price. Russia will have to buy 100+ metric tonnes of gold annually to achieve and maintain the target ratio of 40% gold. That, at a time when physical gold is already in short supply.

A price floor is highly desirable from an investor’s perspective. It means gold prices can go up and are unlikely to go down much because of Russian opportunistic buying. It’s a good deal for Russia – and a good deal for gold investors as well.