Russia Nixes Gold Sale After Leak

MrOrganic

http://online.wsj.com/article/SB125665029613110203.html


MOSCOW -- Russia postponed a plan to sell up to $1.7 billion in gold on the international market after word of the sale was leaked to local news media.

Precious-metals export agency Almazyuvelirexport said Tuesday it would delay the planned move, five days after the Interfax news agency reported it would sell up to 50 metric tons (1.6 million troy ounces) in London before the end of the year to cover the state budget deficit.

In an interview, the agency's deputy chief, Sergey Gorny, declined to comment further but said that more information may be available after Nov. 10.

On Thursday, Interfax had cited an unidentified person as saying that the state's Gokhran precious-metals depository was planning to use Almazyuvelirexport to sell a large amount of gold for the first time since Soviet days.

Russia's change of plans highlights the dilemma facing some governments and central banks that are seeking to diversify their reserves beyond U.S. dollar-denominated holdings by investing in assets such as gold, yet may be tempted to lock in profits after gold prices rose to more than $1,000 an ounce.

"For sure Russia wants to fix some profits with gold above $1,000 an ounce," said Nikolai Sosnovsky, a metals analyst at UralSib Capital. "The reason for all this is surging gold prices."

The 50 metric tons of gold mentioned by Interfax represent "quite a big amount," equal to about 30% of Russia's total gold production last year, Mr. Sosnovsky said.

In February, when its reserves of gold totaled 16.7 million troy ounces, the central bank said that it would continue to buy gold in 2009.

Russia's gold and foreign-currency reserves are the world's third-biggest, valued at $418.7 billion as of Oct. 9.

The bullion market appeared unaffected by the postponement of Russia's gold sale, according to Barclays Capital analyst Suki Cooper. The analyst said prices didn't move when news of the sale emerged because there was no certainty over how much gold would be sold.

keepdachange

Damn, I knew my order would get out! Guess I need to hit the BST.....

CaptHenway

Um, how old is that story, if additional info may be available Nov. 10?

roadrunner

For sure Russia wants to fix some profits with gold above $1,000 an ounce," said Nikolai Sosnovsky, a metals analyst at UralSib Capital. "The reason for all this is surging gold prices."

And after they sell this small amount of gold (worth $1.7 BILL) that will have a tiny impact on improving their budget where will they go to be able to buy the gold back at reduced prices? Who is going to give up that much gold in one shot? Now the Central Banks are gold traders? Give me a break!

roadrunner

cohodk

Exacty. So why is that that the Ruble has appreciated 12% against the dollar since June? What a massive "emerging markets", LOL, currency bubble we have created.