Russia Reduces Gold Holdings for First Time in a Year

Photographer: Dario Pignatelli/Bloomberg

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. Close

Gold dropped in September for the first loss in three months as the U.S. Federal... Read More

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Photographer: Dario Pignatelli/Bloomberg

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.

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 $1,356.82 an ounce at 6:21 p.m. in London 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.

Global Investors

The MSCI Emerging Markets Index of equities dropped 1.9 percent in August after tumbling 9.1 percent in the second quarter. Global investors withdrew $26 billion from emerging-market bond funds between May 29 and Sept. 18, representing about 10 percent of their total assets, according to Barclays Plc, citing data from EPFR Global.

Central-bank purchases may total 350 tons in 2013, the World Gold Council predicts, after they added 534.6 tons last year, the most since 1964. Russia raised bullion reserves about 57.4 tons this year, according to Bloomberg calculations based on IMF data. While the nation’s central bank will continue buying bullion, the pace may vary, former First Deputy Chairman and Economy Minister Alexei Ulyukayev said in January.

Gold is a so-called risk asset and Taiwan’s central bank should cut risks when managing reserves, Governor Perng Fai-nan said today. The bank didn’t increase gold holdings, Perng said, responding to a lawmaker’s question whether there’s a plan to boost them after prices fell. Perng didn’t give a timeframe.

Canada, Mexico

Canada’s holdings fell to 3 tons last month from 3.1 tons, and Mexico’s lost 0.1 ton to 123.5 tons, the IMF data showed. Turkey’s holding rose 2.9 tons to 490.3 tons in September, increasing for a third month, the data showed. Azerbaijan’s hoard expanded for a ninth month, while Belarus, Kuwait, the Kyrgyz Republic, Serbia, and Ukraine also added to reserves.

In August, the Philippines bought, while Mozambique sold, according to the data, which update as countries report.

To contact the reporters on this story: Glenys Sim in Singapore at gsim4@bloomberg.net; Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net

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

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