Russia is stepping up its gold production and may soon become the world’s second-largest gold miner, behind China and ahead of Australia. The biggest miner in Russia is developing Sukhoi Log, one of the largest untapped goldfields in the world, which could output as much as 1.7 million ounces a year.
As part of President Putin’s plan to break away from the US dollar, gold production is being channeled into Russia’s gold reserves instead of being sold on the international market. The new mining development will add around 50 tons of gold to Russia’s reserves, which have almost tripled over the past decade.
Malaysia is joining in the gold rally, adding significantly to its gold reserves. Recently, Prime Minister Mahathir Mohamad proposed the creation of a common trading currency for East Asia that would be tied to gold. “The currency that we propose,” Mahatir said, “should be based on gold because gold is much more stable.”
This would further impact the status of the dollar as the preferred currency for global trade, and it would challenge the status of the yen and the yuan in the region. Part of the gold needed to back the currency would come from domestic sources, but to achieve a fully backed currency, gold would likely need to be sourced on the open market, which would be a tremendous boost to the gold market.
Gold is on the rise and has come a long way over the past decade—a period in which we have seen massive gold repatriations across the globe, a virtual halt to central bank gold sales, and significant acquisitions by many countries and/or their central banks for reserve purposes and to break away from the US dollar as the world’s reserve currency.
If central banks—who can print money—prefer to replace their money with gold, shouldn’t you?
I’m always ready to provide advice for clients who wish to diversify into gold, silver, or other precious metals. For a free, non-committing consultation, schedule an appointment.
About Kevin Troy
In his more than 16 years in the financial industry, Kevin has focused on precious metals as investment assets. He has penned numerous articles on buying and selling precious metals and about the best entry and exit strategies for the financial markets. Thousands of clients have benefited from Kevin’s expertise and learned to protect, preserve, and safeguard their investments with precious metals. Kevin has been with Gold Alliance for more than 2 years as a leading Sr. Portfolio Manager, and he oversees a large portion of our client’s portfolios.