nodepositgames| The biggest short position in gold: Russia

SourceNodepositgamesWall Street news

Author: Chen Hanxue

Recently, the Russian Ministry of Finance is considering abolishing the gold export tax, which may be a sign that it is about to sell gold and increase revenue.

In the six months after the outbreak of the Russian-Ukrainian crisis, Russia's international reserves fell by 14% at one point, but rebounded after the fourth quarter of 2022 and entered a relatively narrow range after 2023, with a shock center of about $590 billion.

Picture: total Russian official reserves and ruble exchange rate

However, since the second half of last year, the internal structure of Russia's international reserves has changed significantly: the scale of foreign exchange is gradually declining, while the scale of gold is further increasing.

Picture: the internal structure of Russia's official reserve assets has been divided since the second half of last year.

Today, Russia's gold reserves account for 26% of its total international reserves, the highest level since March 2000.

So what is Russia hoarding so much gold for? How long can this trend continue?

Over the past decade, Russia has gradually drifted away from the road of "de-westernization".

In fact, Russia has begun the process of de-dollarization since the United States imposed sanctions on Russia after the Crimean crisis in 2014. Among them, it involves adjusting the structure of its official reserves, the most important of which is selling US bonds and buying gold.

The share of dollars in Russia's foreign reserves, which reached 35 per cent respectively in 2014, has continued to decline since then. In June 2021, Russian finance directly announced that it had cleared the proportion of US dollars to zero, and when the Russian-Ukrainian crisis broke out, Russia initially pinned its hopes on a deep binding with Europe, but after Western countries imposed financial and economic sanctions on Russia one after another, removed Russia from the International Capital settlement system (SWIFT) and reduced its dependence on Russian natural gas exports. Russia also realizes that it is useless to hold the euro.

As a result, the Russian finance minister announced in February last year that he would empty the euro share of the national wealth fund that year, along with sterling and yen, leaving only gold, rouble and renminbi assets. It also marks a step forward in Russia's path of "de-westernization". In addition to divesting Western assets, Russia's increase in gold purchases in recent years is also obvious.

Russia itself is the world's second largest gold producer, accounting for 9% of the world's gold output.Nodepositgames.5%, second only to China. Gold export is one of the important ways for Russia to earn foreign exchange.