Russia is accelerating the rate at which it buys gold as the world's largest country continues to move away from traditional asset holdings in response to renewed US sanctions.
According to International Monetary Fund data analysed by Bloomberg, Moscow bought 26.1 tonnes of gold in July. That is the largest single monthly purchase since late 2017 and gives Russia a total of 2,170 tonnes of gold in reserve.
At current prices, those reserves are worth around $83.6 billion, or around R1.2 trillion. A Russian government website lists the value of the holdings at around $77 billion at the end of July.
As Russia buys gold, it continues to sell US Treasuries. The shift in strategy is believed to be in response to sanctions placed against the state in 2011 for its actions in Crimea. According to reports in July, Russia has lowered its holdings of US debt from $96.1 billion in March to $48.7 billion in April and then to just $14.9 billion in May.
Moscow sees gold as a "100% guarantee from legal and political risks," Dmitry Tulin, first deputy governor of the Russian central bank, said when it was first revealed that Russia was selling off US debt.
News of Russia's increase gold reserves came shortly after senior US officials made clear that the Trump administration is ready to impose even harsher sanctions on Moscow if it does not change its behaviour.
Christopher Ford, assistant secretary at the State Department’s Bureau Of International Security And Nonproliferation, and Sigal Mandelker, Acting Under Secretary of Terrorism and Financial Crimes at the Treasury Department, told a Senate banking hearing that the US is preparing plans to impose more economic pain on Russia.
Also from Business Insider South Africa: