Russia, Kazakhstan Boost Gold Reserves as Turkey Cuts, IMF Says

Russia and Kazakhstan expanded their gold reserves for a ninth straight month in June as purchases slowed amid a price slump.

Russian holdings, the seventh-largest by country, climbed 0.3 metric tons to 996.4 tons, the smallest gain since reserves started to increase in October, International Monetary Fund data show. Kazakhstan’s hoard grew 1.4 tons to 130.9 tons, the smallest expansion since March, data on the website showed. Turkey’s holdings fell for the first time in a year.

Gold slumped 11 percent in June, the biggest monthly loss since September 2011. Prices dropped 23 percent in the second quarter, the worst such performance since at least 1920, as gold entered a bear market in April after investors sold metal from exchange-traded funds at a record pace. Prices are down 20 percent this year amid speculation the U.S. Federal Reserve may taper its bond-buying program that helped bullion cap a 12-year bull run in 2012.

“The flows in the central banks are pretty small now, the big shifts are gone,” Justin Smirk, senior economist at Westpac Banking Corp. (WBC), said by phone from Sydney. “Central bank buying might give us a little bit of a floor, but they’re just soaking up some of what the ETFs are selling. You’re not going to see central banks coming in to push the price up.”

Gold for immediate delivery traded at $1,338.13 an ounce by 10:20 a.m. in Singapore, gaining 8.4 percent in July and set for the best month since January 2012 as lower prices lured buyers.

Turkey Sells

Bullion is heading for its biggest annual drop since 1997 after advancing for 12 years. Gold may resume a bull run if China’s central bank or major Western countries announce gold buying plans, Andrew Wang, general manager of the precious metal department at Standard Bank, said at a conference in Shanghai in June.

Azerbaijan’s holdings increased 2 tons and Ukraine’s hoard rose 2.5 tons, the IMF data show. Belarus, Greece and the Kyrgyz Republic were among nations that added bullion in June, while Mozambique, Serbia and Tajikistan increased holdings in May, according to the data, which update as countries report.

Turkey’s holdings fell 3.8 tons to 441.5 tons in June, after increasing for 11 months through May as it accepted gold in its reserve requirements from commercial banks.

Mexico cut its gold reserves for a 14th month. Germany, Guatemala and Suriname also reduced holdings in June, while Mongolia and Sri Lanka sold in May, the data showed.

-- Editor: James Poole

To contact the reporters on this story: Glenys Sim in Singapore at gsim4@bloomberg.net; Debarati Roy in New York at droy5@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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