Azerbaijan’s State Oil Fund plans to increase its gold holdings by a third next year as the largest crude producer in the former Soviet Union after Russia and Kazakhstan seeks to diversify its reserves.
The fund, known as Sofaz, will buy 10 metric tons of bullion in 2014 after reaching its previous target of 30 tons by the end of this year, Executive Director Shahmar Movsumov told reporters today in Baku, the Azeri capital.
Sofaz, which started weekly purchases of the precious metal in the first quarter of 2012, has bought 26 tons so far, Movsumov said. Investing in gold was a “strategic decision” by Sofaz to diversify assets and the fund has no plans to sell bullion, Movsumov has said.
Gold is heading for its first annual decline since 2000 after some investors lost faith in the metal as a store of value amid evidence of faster economic growth. The price climbed 6.3 percent in August, partly because of escalating tensions between the U.S. and Syria. Last month, Azerbaijan, Russia and Kazakhstan were among nations that increased gold reserves, International Monetary Fund data showed yesterday.
Gold for immediate delivery gained 0.2 percent to $1,337.48 an ounce by 8:53 a.m. in London, advancing for a third day. It’s poised for its first quarterly increase in a year, having risen 8.3 percent since July 1.
Sofaz broadened its mandate last year to keep as much as 5 percent of its assets in gold, real estate, stocks, Australian dollars, Russian rubles and Turkish lira. The Azeri fund, established in 1999 to manage the country’s income from the sale of oil and natural gas, had $34.68 billion of assets as of July 1, almost half of the Caspian Sea nation’s economy.