“The Russian central bank stops buying gold (at fixed prices)!! » Publisher by Charles SANNAT

My dear impertinent, dear impertinent,

Russia’s central bank gold purchases have been in the news for the past few days.

I had expressed my doubts and reservations about such a strategy, and had also shown that it had nothing to do with a “remonetization” of the yellow metal.

This is not to say that this monetization of gold will not happen again, on the contrary, we have probably never been this close to it.

But this was not the subject of the Russian central bank’s decision.

Also, in this changing environment that is ours, things always change very quickly and in this topic as in the others.

Russia’s central bank says it will stop buying gold at a fixed price

Russia’s central bank said on Thursday that due to a “significant change in market conditions” it would buy gold from commercial banks at a negotiated price from April 8. On March 25, the bank said it would buy gold at a fixed price of 5,000 rubles per gram until June 30.

Since this announcement, the ruble has strongly strengthened against the dollar. Five thousand rubles were worth about $52 on March 25 and about $63 on Thursday.

The price of gold on the international market remained stable, around 60 dollars per gram, or 1,900 dollars per ounce.

Russia is one of the world’s largest gold producers, but the country’s refiners were banned from selling bullion on the London market, the world’s largest, after the Kremlin sent troops to Ukraine in February. ($1 = 78.6830 rubles)

The central bank will buy gold… at a “floating” price!

The decision of the Russian central bank is not illogical. Quite the contrary, and it will be forced to be very agile depending on the course of the ruble, which is by definition volatile during this period of war and sanctions.

For the time being, the Russian government has managed to stabilize the course of its currency and bring it back to its pre-war level. So buying gold at 5,000 rubles was a “bad deal” as Russia could have bought it at a much cheaper price on the international market.

In short, it can be clearly seen that here Russia is not trying to put gold back into its monetary system, but to increase its gold reserves at the best price in order to be able to deal with all eventualities, including returning to a form of the gold standard.

It is already too late, but all is not lost.

Get ready!

Carlos Sannat

“Insolence” means “impertinence” in Latin.
Write me at charles@insolentiae.com
Write to my wife helene@insolentiae.com

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Source news agency Reuters via ZoneBourse.com here

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