The Diplomat points out that Russia, Kazakhstan and China have been busy buying up gold. To begin with, Russia was the largest buyer of gold last December in order to prop up its currency while Kazakhstan, whose economy is closely tied to Russia’s and who’s mining industry is dominated by chromium, copper, zinc and uranium, produces around 22 tons of gold a year. Albert Rau, Kazakhstan’s minister for investments, has said that “given the turbulent global economy condition, the National [Central] Bank has been buying out all the fine gold produced.” They have been doing this for two years.
Finally, China has become the world’s largest producer of gold (around 14% of total global production) and has a strategy of retaining all domestically produced gold within its borders in order to keep large volumes of it away from international markets to avoid inflating supply and causing gold prices to fall.
The Diplomat went on to point out:
Contextually, China, Russia, Belarus, Malaysia, Iran, Azerbaijan, and Kazakhstan have hoarded gold to diversify their portfolios and avoid excessive competition for the dollar that would only strengthen the greenback against their own currencies. Only countries that are financially stable – or that are trying to recover from shocks, like Russia and other oil-exporters – are in the market for gold. Financially weaker countries, such as Mozambique, Ukraine, and Tajikistan, had to reduce gold reserves to fuel their national economies. Conversely, with a strong rupee, India seems the only country in the ever-emerging Asian continent to have limited desire for gold. The country’s reserves remained unchanged last year and are poised to slowly diminish in the years ahead.
To read the whole article, Kazakhstan and the Emerging Market Gold Rush, go to the website of The Diplomat.
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