Russia Reduce Gold Stash

Russia reduced gold reserves for the first time in a year in September as Mexico cut holdings for a 17th straight month, according to the International Monetary Fund. Kazakhstan expanded assets for a 12th month.

Reserves in Russia declined about 0.37 metric ton to 1,015.1 tons, data on the IMF’s website showed. Kazakhstan’s holdings expanded 2.52 tons to 137.04 tons, the data showed.

Gold dropped in September for the first loss in three months as the U.S. Federal Reserve unexpectedly refrained from slowing its $85 billion in monthly bond purchases. Expectations that tapering would start spurred losses in emerging-market stocks and some currencies in August. Bullion has lost 19 percent this year as investors reduced holdings in exchange-traded products on prospects for a global economic recovery.

“Given the buyers were predominantly emerging markets and what’s been happening in emerging markets over the last few months, it makes sense to see either a slowdown in purchases and the use of the banks’ balance sheet for other purposes, or outright sales,” said Peter Richardson, an analyst at Morgan Stanley. “When you combine that with selling from ETFs, the whole pricing pattern starts to make a bit more sense.”

Gold for immediate delivery, which lost 4.8 percent last month, traded at $1,349.51 an ounce at 3:28 p.m. in Singapore from $1,350.80 on Oct. 25. Holdings in ETPs have contracted every month this year, sending assets down 29 percent, according to data compiled by Bloomberg.

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell