By Andrew Critchlow, Commodities editor
6:00AM GMT 13 Nov 2014
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Russia has taken advantage of lower gold prices to pack the vaults of its central bank with bullion as it prepares for the possibility of a long, drawn-out economic war with the West.
The latest research from the World Gold Council reveals that the Kremlin snapped up 55 tonnes of the precious metal - far more than any other nation - in the three months to the end of September as prices began to weaken.
Vladimir Putin’s government is understood to be hoarding vast quantities of gold, having tripled stocks to around 1,150 tonnes in the last decade. These reserves could provide the Kremlin with vital firepower to try and offset the sharp declines in the rouble.
Russia’s currency has come under intense pressure since US and European sanctions and falling oil prices started to hurt the economy. Revenues from the sale of oil and gas account for about 45pc of the Russian government’s budget receipts.
The biggest buyers of gold after Russia are other countries from the Commonwealth of Independent States, led by Kazakhstan and Azerbaijan.
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The few Russians that I know have told me that their friends back home are very good at “hedging” the ruble by buying food, precious metals, etc. I suppose to that extent the people in villages are probably better of because they’ll have food and warmth (assuming a big wood pile) for themselves.
China and Russia have been buying up gold like crazy recently.