Central banks in several regions of the World are building up their gold reserves.

A large part of these Central Bank purchases of gold bullion are not disclosed. They are undertaken through third party contracting companies, with utmost discretion. 

The evidence amply suggests that US dollar holdings and US dollar denominated debt instruments are being traded in for gold, which in turn puts pressure on the US dollar.  

In the course of the last ten years, both China and Russia have boosted domestic production of gold, a large share of  which is being purchased by their central banks.

China is currently the World’s largest gold producer followed by Australia and Russia. “It has long been assumed that China is surreptitiously building up its gold reserves through buying local production”.

it is worth noting that Chinese companies are investing in gold mining in different regions of the World, largely with a view to establishing a global hegemony in production. It is worth noting that China’s production is high, its reserves are significantly lower than those of Australia, Russia and the U.S.  China and Russia are also collaborating in terms of joint ventures in gold mining:

• Major Chinese firms will ramp up investment in foreign gold mines, ….


• Chinese firm Shandong Gold purchase of a 50% stake in the Veladero mine in Argentina from Barrick Gold for USD960mn. …


• state-owned China National Gold Group’s USD300mn purchase of the Jinfeng gold mine from Eldorado Gold and Indonesian firm PT Amman Mineral International’s USD1.3bn purchase of Newmont Mining’s Indonesian assets, …


•  In 2015, China set up a new USD16.0bn mining fund to develop gold mining projects along the planned Silk Road infrastructure route. (See Fitch Solutions)

Graph for 2017: Wikipedia, quoting “Where Have All the Gold Mines Gone?” and “U.S. Geological Survey, Mineral Commodity Summaries” (PDF). USGS. 2017.

China’ Central Bank Reserves

China’s central bank gold reserves have increased from 600 tons in 2003 to 1054 tons in 2009. If we go by official statements, China’s gold reserves have tripled since 2003. They currently stand at 1842 metric tons (July 2018)

Russia

The Russian Central bank purchases gold from a Russian state company “Gokhran, which is the marketing arm and central repository for the country’s mined gold production. Mineweb. Recent reports (April 2018) confirm that Russia purchased 300,000 troy ounces of  gold in March 2018, i.e. 18.66 metric tons.

Russia’s Central bank holdings were in excess of 20 million troy ounces or 622 tons (January 2010). The latest figures (July 2018) confirm that gold reserves of the Russian Federation have more than tripled since 2010. They currently stand (July 2018) at 1909.8 tons. (see diagram below).

Turkey’s Gold Holdings  

There has been an upward trend since January 2017. Turkish media Yeni Safak suggests that the Erdogan government had ordered in 2017 the repatriation of “all of its gold stored in the U.S. Federal Reserve” i.e. 220 metric tons.

The published World Gold Council figure for July 2018 is contradictory.

Gold Prices

It should be understood that actual purchases of physical gold are not the only factor in explaining the movement of gold prices. The gold market is marked by organized speculation by large scale financial institutions.

The gold market is notoriously unstable. It is characterised by numerous paper instruments, gold index funds, gold certificates, OTC gold derivatives (including options, swaps and forwards), which play a strong role, particularly in short-term movement of gold prices.

The price of gold is an instrument of financial warfare. In the present context, Wall Street is intent upon manipulating the gold market.