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Russia stockpiles gold to prop up Central Bank

Russia purchased twice the gold of the next largest buyer, Kazakhstan.

By
Ed Adamczyk
A worker holds a 13 kilogram (28.66 pound) gold bar at a foundry in Magadan, about 6,000 kilometers (3,700 miles) east of Moscow. FILE/UPI/Anatoli Zhdanov
A worker holds a 13 kilogram (28.66 pound) gold bar at a foundry in Magadan, about 6,000 kilometers (3,700 miles) east of Moscow. FILE/UPI/Anatoli Zhdanov | License Photo

LONDON, Nov. 13 (UPI) -- Russia purchased 55 metric tons of gold in the third quarter of 2014 to strengthen its Central Bank, London's World Gold Council reported.

Taking advantage of the lowest gold prices in four years, Russia is preparing for a long economic war with the West and the possibility of a sustained depression of the Russian ruble, British newspaper The Telegraph said Thursday.

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"Central banks do not accumulate gold for no reason; you hold gold as part of your reserves to guard against these worst case scenarios," Nic Brown of the French investment firm Natixis told the International Business Times. "It would make sense that in a situation in which the Russians found their dollar reserves were no longer useful, for whatever reason, they would want to use alternatives, and the country has accumulated a large amount of gold in recent years."

The amount Russia purchased was twice the amount purchased in the quarter by the next largest buyer, Kazakhstan.

The fall of the ruble, economic sanctions against Russia by the United States and the European Union and the fall in price of Russia's biggest exports, oil and gas, have sparked an economic crisis in Russia. The Central Bank floated the value of the ruble this week so that the Bank's dollar reserves would not be required to stabilize it.

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