Russia's central bank said that it will stop purchasing gold beginning April 1 after spending more than US$40 billion in accumulating bullion over the past five years, Bloomberg News reported March 30.
The newswire said that the central bank did not explain its decision, but analysts said that the country likely does not need more gold anymore as it already has a lot of the metal stashed in its reserves.
"The central bank is now signaling to gold sellers that they should redirect their supplies externally," said ING Bank's chief economist in Russia, Dmitry Dolgin.
The newswire also quoted Nordea Bank analyst Tatiana Evdokimova as saying, "The central bank probably doesn't want to increase gold's share in reserves, while the size of reserves is falling."
Eduard Rybkin, deputy head of Moscow-based Lanta Bank's precious metals division, said that more gold coming from Russia could ease tightness in the market and that there would be demand from London, India, Turkey and Singapore.
The report noted that gold comprises about 20% of Russia's international reserves, and the country's bullion stockpile is valued at about US$120 billion.
The daily closing price of gold fluctuated as much as 11.8% through March as investors turned to the safe-haven commodity for shelter while fears of the COVID-19 pandemic pummeled the world economy.