Russia added about 9.4 metric tons of gold valued at $400 million to reserves in July as it expanded holdings for a fourth consecutive month to the highest in at least two decades. The country's stockpile, the fifth-biggest, increased to 35.5 million ounces (1,104 tons) last month from 35.2 million ounces at the end of June, data posted on the central bank's website showed. The amount of gold now held is the most since at least 1993, according to International Monetary Fund data. Russia's reserves, which overtook those of Switzerland and China this year, almost tripled since the end of 2005, IMF data show. The ruble declined about 6.3 percent against the dollar since June as the worst standoff with the U.S. since the Cold War intensified. The conflict, stemming from President Vladimir Putin's annexation of Ukraine's Crimea peninsula in March, has led to sanctions that have hurt trade and threatened to send Russia's $2 trillion economy into a recession. "Russia has been the largest official buyer for years," Eugen Weinberg, the head of commodities research at Commerzbank AG in Frankfurt, said today by e-mail. "It's a part of its long-term strategy of amassing gold reserves and diversifying it foreign-exchange reserves." European leaders are pushing to halt the conflict that's killed more than 2,000 people and fractured Ukraine. The war, which Ukraine and its allies say is being fueled by Putin's support for insurgents and which Russia denies it's involved in, helped gold rise 7.7 percent to $1,294.18 an ounce this year on demand for a haven. The metal averaged $1,311.82 last month, valuing Russia's gold addition at $398 million. Currency Reserves "Especially given the current relations cool-down with the West and re-orientation to the East, it might be expected that the share of euros and dollars fall further and yuan and probably gold increase further," Weinberg said. Central banks may add as much as 500 tons to reserves this year, the World Gold Council said on Aug. 14. Nations increased holdings by 409 tons last year and 544 tons in 2012. Gold accounts for about 9.7 percent of Russia's total reserves, according to the London-based gold council. That compares with about 70 percent for the U.S. and Germany, the biggest bullion holders, the data show. Italy and France have the next largest reserves. Russia mined 248.8 tons of gold last year, ranking it as the third-biggest producer, behind China and Australia, according to GFMS, a research unit of Thomson Reuters Corp. Bloomberg competes with Thomson Reuters in selling financial and legal information and trading systems. Source: Bloomberg
