Russia has emerged as the largest buyer of gold, hoping to use its growing reserves to protect it against a possible global financial calamity.
The country has purchased 570 metric tons of the precious metal over the last decade. A Russian legislator told Bloomberg that Russia’s gold-buying spree is intended to boost its sovereignty in the event that one of the world’s reserve currencies collapses.
Still, Russia currently has only the world’s eight largest gold reserve with about 958 tons. By contrast, the U.S. has the largest gold reserve at about 8,134 tons, followed by Germany, Italy, France, China and Switzerland. The U.S. dollar remains the world’s leading reserve currency.
Russian Prime Minister Vladamir Putin has encouraged Russian banks to stockpile gold. The acquisitions have come as the metal’s price has risen steadily in recent years amid growing uncertainty over the stability of the U.S. and eurozone economies.
Economic stimulus efforts — quantitative easing — is driving emerging nations to buy gold, even as developed nations sell their gold reserves. Russia and China have become net buyers of the metal.
Last month, Germany announced that it would transfer 674 metric tons of its gold reserve from vaults in New York and Paris back to German soil.