Sell gold | Will Putin's Next Step Be To Sell Gold? | Zero Hedge

Will Putin's Next Step Be To Sell Gold? | Zero Hedge
Russia is Selling Oil and Gas in Exchange for Physical Gold
Russia Has Begun Selling Its Gold, According To SocGen | Zero ...
Russia Busts "Gold-Selling" Rumors, Reports It Bought Another ...
Russia Is Fighting Its Financial Problems By Selling The Gold They ...
UK company sells gold, silver refineries after 162 years | MINING.com

Will Putin's Next Step Be To Sell Gold? | Zero Hedge

Posted: 17 Dec 2014 01:01 PM PST

"Russia is at a critical juncture and given the sanctions placed upon them and the rapid decline in oil prices, they may be forced to dip into their gold reserves, if it happens it will push gold lower." That is what, according to some people Bloomberg has quoted, is in the cards.

As Bloomberg reports,

Russia's surprise interest-rate increase failed to stop the plummeting ruble. Another tool available to repair economic havoc caused by sanctions and falling oil prices: selling gold.

Russia holds about 1,169.5 metric tons of the precious metal, the central bank said last month. That's about 10 percent of its foreign reserves, according to the London-based World Gold Council. The country added 150 tons this year through Nov. 18, central bank Governor Elvira Nabiullina told lawmakers. The Bank of Russia declined to comment on its gold reserves.

Russia's cash pile has dropped to a five-year low as its central bank spent more than $80 billion trying to slow the ruble's retreat. The currency's collapse combined with more than a 40 percent tumble in oil prices this year is robbing Russia of the hard currency it needs in the face of sanctions imposed after President Vladimir Putin's annexation of Crimea. A fall in gold prices signals that traders are betting that the country will tap its reserves, according to Kevin Mahn, who oversees $150 million at Parsippany, New Jersey-based Hennion & Walsh Asset Management.

"Russia is at a critical juncture and given the sanctions placed upon them and the rapid decline in oil prices, they may be forced to dip into their gold reserves," Mahn said. "If it happens it will push gold lower."

But others are less convinced.

"There are a number of ways that they could use their gold," Robin Bhar, an analyst at Societe Generale SA in London, said today by phone. "They could use it as collateral for bank loans, or for loans from multi-lateral agencies. They could sell it directly in the market if they want to raise foreign-exchange" reserves, including to get more dollars, he said.

If Russia decides to sell, the figures to confirm the move wouldn't be available for a few months, Bhar said.

Selling gold is usually "one of the last weapons" for central banks because some use the metal to help back their currencies, George Gero, a precious-metal strategist at RBC Capital Markets in New York, said in a telephone interview. "They are probably still accumulating gold and keeping it for a bigger crisis," he said.

While some suggest the accumulation was "tradition" it is still nonetheless an impressive aggregation of the barbarous relic:

So given the efforts to build this gold-backing for their nation's currency, do we really expect Putin to now dump his physical: or perhaps more strategically suggest a true gold-backed currency and jawbone the currency that way?

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Russia is Selling Oil and Gas in Exchange for Physical Gold

Posted: 26 Dec 2014 08:19 AM PST

Accusations of the West towards Putin are traditionally based on the fact that he worked in the KGB. And therefore he is a cruel and immoral person. Putin is blamed for everything. But nobody ever accused Putin of the lack of intelligence.

Any accusations against this man only emphasize his ability for quick analytical thinking and making clear and balanced political and economic decisions.

Often Western media compares this ability with the ability of a grandmaster, conducting a public chess simul. Recent developments in US economy and the West in general allow us to conclude that in this part of the assessment of Putin's personality Western media are absolutely right.

Despite numerous success reports in the style of Fox News and CNN, today, Western economy, led by the United States is in Putin's trap, the way out of which no one in the West can see or find.And the more the West is trying to escape from this trap, the more stuck it becomes.

What is the truly tragic predicament of the West and the United States, in which they find themselves? And why all the Western media and leading Western economists are silent about this, as a well guarded military secret? Let's try to understand the essence of current economic events, in the context of the economy, setting aside the factors of morality, ethics and geopolitics.

Development of crude oil prices.

After realizing its failure in Ukraine, the West, led by the US set out to destroy Russian economy by lowering oil prices, and accordingly gas prices as the main budget sources of export revenue in Russia and the main sources of replenishment of Russian gold reserves. It should be noted that the main failure of the West in Ukraine is not military or political. But in the actual refusal of Putin to fund the Western project of Ukraine at the expense of the budget of Russian Federation. What makes this Western project not viable in the near and inevitable future.

Last time under president Reagan, such actions of the West's lowering of oil prices led to 'success' and the collapse of USSR. But history does not repeat itself all the time. This time things are different for the West. Putin's response to the West resembles both chess and judo, when the strength used by the enemy is used against him, but with minimal costs to the strength and resources of the defender. Putin's real policies are not public. Therefore, Putin's policy largely has always focused not so much on effect, but on efficiency.

Very few people understand what Putin is doing at the moment. And almost no one understands what he will do in the future.

No matter how strange it may seem, but right now, Putin is selling Russian oil and gas only for physical gold.

Putin is not shouting about it all over the world. And of course, he still accepts US dollars as an intermediate means of payment. But he immediately exchanges all these dollars obtained from the sale of oil and gas for physical gold!

To understand this, it is enough to look at the dynamics of growth of gold reserves of Russia and to compare this data with foreign exchange earnings of the Russia coming from the sale of oil and gas over the same period.

Moreover, in the third quarter the purchases by Russia of physical gold are at all-time high record levels. In the third quarter of this year, Russia had purchased an incredible amount of gold in the amount of 55 tons. It's more than all the central banks of all countries of the world combined (according to official data)!

In total, the central banks of all countries of the world have purchased 93 tons of the precious metal in the third quarter of 2014. It was the 15th consecutive quarter of net purchases of gold by Central banks. Of the 93 tonnes of gold purchases by central banks around the world during this period, the staggering volume of purchases – of 55 tons – belongs to Russia.

Not so long ago, British scientists have successfully come to the same conclusion, as was published in the Conclusion of the U.S. Geological survey a few years ago. Namely: Europe will not be able to survive without energy supply from Russia. Translated from English to any other language in the world it means: "The world will not be able to survive if oil and gas from Russia is subtracted from the global balance of energy supply".

Thus, the Western world, built on the hegemony of the petrodollar, is in a catastrophic situation. In which it cannot survive without oil and gas supplies from Russia. And Russia is now ready to sell its oil and gas to the West only in exchange for physical gold! The twist of Putin's game is that the mechanism for the sale of Russian energy to the West only for gold now works regardless of whether the West agrees to pay for Russian oil and gas with its artificially cheap gold, or not.

Because Russia, having a regular flow of dollars from the sale of oil and gas, in any case, will be able to convert them to gold with current gold prices, depressed by all means by the West. That is,at the price of gold, which had been artificially and meticulously lowered by the Fed and ESF many times, against artificially inflated purchasing power of the dollar through market manipulation.

Interesting fact: the suppression of gold prices by the special department of US Government – ESF (Exchange Stabilization Fund) – with the aim of stabilizing the dollar has been made into a law in the United States.

In the financial world it is accepted as a given that gold is an antidollar.

In 1971, US President Richard Nixon closed the 'gold window', ending the free exchange of dollars for gold, guaranteed by the US in 1944 at Bretton Woods.
In 2014, Russian President Vladimir Putin has reopened the 'gold window', without asking Washington's permission.

Right now the West spends much of its efforts and resources to suppress the prices of gold and oil. Thereby, on the one hand to distort the existing economic reality in favor of the US dollar and on the other hand, to destroy the Russian economy, refusing to play the role of obedient vassal of the West.

Today assets such as gold and oil look proportionally weakened and excessively undervalued against the US dollar. It is a consequence of the enormous economic effort on the part of the West.

And now Putin sells Russian energy resources in exchange for these US dollars, artificially propped by the efforts of the West. With which he immediately buys gold, artificially devalued against the U.S. dollar by the efforts of the West itself!

There is another interesting element in Putin's game. It's Russian uranium. Every sixth light bulb in the USA depends on its supply. Which Russia sells to the US too, for dollars.

Thus, in exchange for Russian oil, gas and uranium, the West pays Russia with dollars, purchasing power of which is artificially inflated against oil and gold by the efforts of the West. But Putin uses these dollars only to withdraw physical gold from the West in exchange, for the price denominated in US dollars, artificially lowered by the same West.

This truly brilliant economic combination by Putin puts the West led by the United States in a position of a snake, aggressively and diligently devouring its own tail.

The idea of this economic golden trap for the West, probably originated not from Putin himself. Most likely it was the idea of Putin's Advisor for Economic Affairs – doctor Sergey Glazyev. Otherwise why seemingly not involved in business bureaucrat Glazyev, along with many Russian businessmen, was personally included by Washington on the sanction list? The idea of an economist, doctor Glazyev was brilliantly executed by Putin, with full endorsement from his Chinese colleague – Xi Jinping.

Especially interesting in this context looks the November statement of the first Deputy Chairman of Central Bank of Russia Ksenia Yudaeva, which stressed that the Central Bank of Russia can use the gold from its reserves to pay for imports, if needed. It is obvious that in terms of sanctions by the Western world, this statement is addressed to the BRICS countries, and first of all China. For China, Russia's willingness to pay for goods with Western gold is very convenient. And here's why:

China recently announced that it will cease to increase its gold and currency reserves denominated in US dollars. Considering the growing trade deficit between the US and China (the current difference is five times in favor of China), then this statement translated from the financial language reads: "China stops selling their goods for dollars". The world's media chose not to notice this grandest in the recent monetary history event . The issue is not that China literally refuses to sell its goods for US dollars. China, of course, will continue to accept US dollars as an intermediate means of payment for its goods. But, having taken dollars, China will immediately get rid of them and replace with something else in the structure of its gold and currency reserves. Otherwise the statement made by the monetary authorities of China loses its meaning: "We are stopping the increase of our gold and currency reserves, denominated in US dollars." That is, China will no longer buy United States Treasury bonds for dollars earned from trade with any countries, as they did this before.

Thus, China will replace all the dollars that it will receive for its goods not only from the US but from all over the world with something else not to increase their gold currency reserves, denominated in US dollars. And here is an interesting question: what will China replace all the trade dollars with? What currency or an asset? Analysis of the current monetary policy of China shows that most likely the dollars coming from trade, or a substantial chunk of them, China will quietly replace and de facto is already replacing with Gold.

Are we witnessing the end of dollar era?

In this aspect, the solitaire of Russian-Chinese relations is extremely successful for Moscow and Beijing.Russia buys goods from China directly for gold at its current price. While China buys Russian energy resources for gold at its current price. At this Russian-Chinese festival of life there is a place for everything: Chinese goods, Russian energy resources, and gold – as a means of mutual payment. Only US dollar has no place at this festival of life. And this is not surprising. Because the US dollar is not a Chinese product, nor a Russian energy resource. It is only an intermediate financial instrument of settlement – and an unnecessary intermediary. And it is customary to exclude unnecessary intermediaries from the interaction of two independent business partners.

It should be noted separately that the global market for physical gold is extremely small relative to the world market for physical oil supplies. And especially the world market for physical gold is microscopic compared to the entirety of world markets for physical delivery of oil, gas, uranium and goods.

Emphasis on the phrase "physical gold" is made because in exchange for its physical, not 'paper' energy resources, Russia is now withdrawing gold from the West, but only in its physical, not paper form. So does China, by acquiring from the West the artificially devalued physical gold as a payment for physical delivery of real products to the West.

The West's hopes that Russia and China will accept as payment for their energy resources and goods "shitcoin" or so-called "paper gold" of various kinds also did not materialize. Russia and China are only interested in gold and only physical metal as a final means of payment.

For reference: the turnover of the market of paper gold, only of gold futures, is estimated at $360 billion per month. But physical delivery of gold is only for $280 million a month. Which makes the ratio of trade of paper gold versus physical gold: 1000 to 1.

Using the mechanism of active withdrawal from the market of one artificially lowered by the West financial asset (gold) in exchange for another artificially inflated by the West financial asset (USD),Putin has thereby started the countdown to the end of the world hegemony of petrodollar. Thus, Putin has put the West in a deadlock of the absence of any positive economic prospects. The West can spend as much of its efforts and resources to artificially increase the purchasing power of the dollar, lower oil prices and artificially lower the purchasing power of gold. The problem of the West is that the stocks of physical gold in possession of the West are not unlimited. Therefore, the more the West devalues oil and gold against the US dollar, the faster it loses devaluing Gold from its not infinite reserves. In this brilliantly played by Putin economic combination the physical gold is rapidly flowing to Russia, China, Brazil, Kazakhstan and India, the BRICS countries, from the reserves of the West. At the current rate of reduction of reserves of physical gold, the West simply does not have the time to do anything against Putin's Russia until the collapse of the entire Western petrodollar world. In chess the situation in which Putin has put the West, led by the US, is called "time trouble".

The Western world has never faced such economic events and phenomena that are happening right now. USSR rapidly sold gold during the fall of oil prices. Russia rapidly buys gold during the fall in oil prices. Thus, Russia poses a real threat to the American model of petrodollar world domination.

The main principle of world petrodollar model is allowing Western countries led by the United States to live at the expense of the labor and resources of other countries and peoples based on the role of the US currency, dominant in the global monetary system (GMS) . The role of the US dollar in the GMS is that it is the ultimate means of payment. This means that the national currency of the United States in the structure of the GMS is the ultimate asset accumulator, to exchange which to any other asset does not make sense. What the BRICS countries, led by Russia and China, are doing now is actually changing the role and status of the US dollar in the global monetary system. From the ultimate means of payment and asset accumulation, the national currency of the USA, by the joint actions of Moscow and Beijing is turned into only an intermediate means of payment. Intended only to exchange this interim payment for another and the ulimate financial asset – gold. Thus, the US dollar actually loses its role as the ultimate means of payment and asset accumulation, yielding both of those roles to another recognized, denationalized and depoliticized monetary asset – gold.

Traditionally, the West has used two methods to eliminate the threat to the hegemony of petrodollar model in the world and the consequent excessive privileges for the West.

One of these methods – colored revolutions. The second method, which is usually applied by the West, if the first fails – military aggression and bombing.

But in Russia's case both of these methods are either impossible or unacceptable for the West.

Because, firstly, the population of Russia, unlike people in many other countries, does not wish to exchange their freedom and the future of their children for Western sausage. This is evident from the record ratings of Putin, regularly published by the leading Western rating agencies. Personal friendship of Washington protégé Navalny with Senator McCain played for him and Washington a very negative role. Having learned this fact from the media, 98% of the Russian population now perceive Navalny only as a vassal of Washington and a traitor of Russia's national interests. Therefore Western professionals, who have not yet lost their mind, cannot dream about any colour revolution in Russia.

As for the second traditional Western way of direct military aggression, Russia is certainly not Yugoslavia, not Iraq or Libya. In any non-nuclear military operation against Russia, on the territory of Russia, the West led by the US is doomed to defeat. And the generals in the Pentagon exercising real leadership of NATO forces are aware of this. Similarly hopeless is a nuclear war against Russia, including the concept of so-called "preventive disarming nuclear strike". NATO is simply not technically able to strike a blow that would completely disarm the nuclear potential of Russia in all its many manifestations. A massive nuclear retaliatory strike on the enemy or a pool of enemies would be inevitable. And its total capacity will be enough for survivors to envy the dead. That is, an exchange of nuclear strikes with a country like Russia is not a solution to the looming problem of the collapse of a petrodollar world. It is in the best case, a final chord and the last point in the history of its existence. In the worst case – a nuclear winter and the demise of all life on the planet, except for the bacteria mutated from radiation.

The Western economic establishment can see and understand the essence of the situation.Leading Western economists are certainly aware of the severity of the predicament and hopelessness of the situation the Western world finds itself in, in Putin's economic gold trap. After all, since the Bretton Woods agreements, we all know the Golden rule: "Who has more gold sets the rules." But everyone in the West is silent about it. Silent because no one knows now how to get out of this situation.

If you explain to the Western public all the details of the looming economic disaster, the public will ask the supporters of a petrodollar world the most terrible questions, which will sound like this:

How long will the West be able to buy oil and gas from Russia in exchange for physical gold?
And what will happen to the US petrodollar after the West runs out of physical gold to pay for Russian oil, gas and uranium, as well as to pay for Chinese goods?

No one in the West today can answer these seemingly simple questions.

And this is called "Checkmate", ladies and gentlemen. The game is over.

Source in Russian: Investcafe

Translated by ORIENTAL REVIEW

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Russia Has Begun Selling Its Gold, According To SocGen | Zero ...

Posted: 18 Dec 2014 10:05 AM PST

A few days ago, we first reported a rumor that was floating around Wall Street desks, and which, according to some, was the "reason" that gold was being kept lower even as sovereign risk was exploding around the globe. The rumor was that Russia was selling its gold holdings:

This led to Bloomberg speculating, and us rhetorically asking, if "Putin's next step will be to sell gold"

"Russia is at a critical juncture and given the sanctions placed upon them and the rapid decline in oil prices, they may be forced to dip into their gold reserves, if it happens it will push gold lower." That is what, according to some people Bloomberg has quoted, is in the cards.

While some suggest the accumulation was "tradition" it is still nonetheless an impressive aggregation of the barbarous relic:

So given the efforts to build this gold-backing for their nation's currency, do we really expect Putin to now dump his physical: or perhaps more strategically suggest a true gold-backed currency and jawbone the currency that way?

So what is the truth? Well, we won't for sure until the next official report by the Central Bank of Russia hits the IMF database, but in the menatime, SocGen just reported that the selling may have started:

Looking at the correlation between gold and oil prices, the chart above illustrates that both commodities were moving closely in tandem over the July to September period. However, this link was broken in early October when gold embarked upon the new rally on weaker US dollar and some physical support, while oil prices continued to slide. The rally, nonetheless, proved to be short lived, as gold returned to its downtrend after hitting the $1,250 level on 21 October, and continued to move down, along with oil, for the remainder of the month.

Starting from November we have seen gold and oil prices moving in opposite directions again. As we mentioned earlier, oil prices came under significant pressure on concerns about a growing global oil supply glut. On the contrary, gold recovered some of its earlier losses, supported by fresh buying interest in India on the news that the Reserve Bank of India (RBI) was reviewing gold import restrictions that were introduced last year. Towards the end of November, the RBI surprised the markets by announcing the withdrawal of the 80:20 rule, which saw gold imports surging to 150 tonnes that month, according to the latest statistics from the Indian Ministry of Commerce and Industry. In addition, worries over the potential impact of stronger US dollar on the global economy spurred some safe-haven buying.

...

It is not surprising that Russia has been tackling its financial problems by selling the gold they have been accumulating. According to the IMF data this year, one of the world's largest oil exporters acquired 115 tonnes in the January to September period, and added another 18.9 tonnes to their reserves in October. Russia has been purchasing the yellow metal at a faster pace this year, taking advantage of lower gold prices and, perhaps, preparing for the possibility of a long-lasting restrained relationship with the West and economic downturn. It appears possible that the Central Bank of Russia has started to sell off some of its gold reserves in December, with some sources reporting that official gold reserves dropped by $4.3 billion in the first week of the month.

Of course, it should be noted that SocGen and its "sources" have a conflict: in an indirect way, none other than SocGen is suddenly very interested in Russia stabilizing its economy because as we wrote before, "Russia Contagion Spreads To European Banks : French SocGen, Austrian Raiffeisen Plummet" which also sent SocGen's default risk higher in recent days. So if all it will take to stabilize the RUB sell off, reduce fears of Russian contagion, and halt the selloff of SocGen stocks is a "source" reporting what may or may not be the case, so be it.

In any event, keep a close eye on the next update of Russian official gold holdings: it may well be the next big story of where gold is headed and, if true, an even more important question will be who is Russia selling its gold to.

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Russia Busts "Gold-Selling" Rumors, Reports It Bought Another ...

Posted: 19 Dec 2014 04:10 AM PST

Yesterday, when we reported the latest rumor of Russian gold selling, this time out of SocGen, we said that "it should be noted that SocGen and its "sources" have a conflict: in an indirect way, none other than SocGen is suddenly very interested in Russia stabilizing its economy because as we wrote before, "Russia Contagion Spreads To European Banks : French SocGen, Austrian Raiffeisen Plummet" which also sent SocGen's default risk higher in recent days. So if all it will take to stabilize the RUB sell off, reduce fears of Russian contagion, and halt the selloff of SocGen stocks is a "source" reporting what may or may not be the case, so be it."

Moments ago, as if to deter further speculation that Russia is indeed converting hard money earned from real resources for fiat paper, the Russian monetary authority made it quite clear, that at least in November, Russia not only did not sell any gold, but in fact bought another 600K ounces in the month of November.

RUSSIAN MONETARY GOLD HOLDINGS RISE VS 37.6M ON NOV. 1
RUSSIAN MONETARY GOLD HOLDINGS 38.2M TROY OZ AS OF DEC. 1

So we can now add another 600K to Russia's most recent holdings:

Which of course means that the very "Russia is selling" rumors that were so effectively used to keep the price of gold low into the recent risk-flaring episode, were capitalized on by the very same Russia, which we do however know sold some $8 billion in US Treasurys in October bringings its total holdings of US paper to the second lowest since 2008...

... and which used these same low prices not to sell, but to buy. At the lowest prices possible.

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Russia Is Fighting Its Financial Problems By Selling The Gold They ...

Posted: 03 Jan 2015 02:30 AM PST

putin gold AP ImagesEditor's Note: Earlier it was reported that the Central Bank's gold reserves decreased by $4.3 billion, quoting Vesti Finance. However, in actuality, it is international reserves assets that have decreased — not gold. Appropriate changes have been made.

Russian international reserves assets decreased from $420.5 billion to $416.2 billion, according to the central bank.

This is down, following a slight increase the week before — when they inched up from $420.5 from $420.4, according to Vesti Finance.

Gold reserves, which are included in international reserves, have remained unchanged — despite the drop in international reserves.

Right now, Russia's facing a slew of economic problems — following the sanctions and dropping oil prices.

In an attempt to arrest the ruble's collapse, the Central Bank of Russia raised rates from 10.5% on Thursday, up from 9.5%.

So far, this has not had the intended effect: the ruble dropped to a new low of nearly 56 rubles to the dollar on Thursday.

ruble dollar Bloomberg

UK company sells gold, silver refineries after 162 years | MINING.com

Posted: 15 Dec 2014 01:09 PM PST

Johnson Matthey PLC announced Monday it has agreed to sell its gold and silver refining business to Asahi Holdings for $184 million in cash as it shifts towards focusing on technology and chemistry.

In a statement, Johnson Matthey said it expects the deal with Asahi, refiner and recycler of precious and rare metals from waste materials, to be finalized in March.

Johnson Matthey, traces its roots back to 1817 as a gold assayer, and became official assayers and refiners to the Bank of England in 1852.

Johnson Matthey's gold and silver refining business operates from refineries in Salt Lake City, US and Brampton, Canada, and casting services from its St Catharines facility in Canada.

In total, the business employs approximately 340 people. It made sales of $69 million in the financial year to end-March and $30 million in the six months to end September.

"The divestment of the Gold and Silver Refining business is in line with our long term strategy to focus on areas where we can use our expertise in chemistry and its applications to deliver high technology solutions or that provide a strategic service to the wider Johnson Matthey group," Chief Executive Robert MacLeod said in a statement.

Johnson Matthey which focuses on platinum group metals catalysts manufacture for the auto and other industries, was recently judged the UK's most admired company according. The Management Today reward now in its 24th year is based on peer ranking.

According to the company's closely watched market forecast platinum and palladium both will post annual supply deficits of more than 1 million ounces this year.

That's not just because of the strikes in South Africa and the depletion of Russian stockpiles, but also improving underlying auto-catalyst demand.

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