Russia shuns world gold market but buys domestic production

From Reuters
Monday, September 10, 2007

http://www.reuters.com/article/RussiaInvestment07/idUSL1076303620070910

MOSCOW -- Russia has no plans to buy or sell gold in the world market and will continue to build state reserves by purchasing from its main producers, a senior central banker told the Reuters Russia Investment Summit on Monday.

"We are not selling gold to the market. We are buying a certain amount of gold from our producers," said Konstantin Korishchenko, deputy chairman of the central bank.

"We are not the kind of investor that starts aggressively buying gold in the market. We are simply doing this very reasonably and gradually, from domestic sources," he said.

Russia's gold and foreign exchange reserves, the world's third-largest, rose to $416 billion on August 31. They have risen 37 percent since the end of last year.

The country is the world's sixth-largest gold producer and has reserves second only to South Africa. Production is expected to drop 2-4 percent this year from 164.32 tonnes (5.28 million ounces) last year, before increasing again from 2009 as a number of large development projects come on stream.

Russia's largest gold producers are Polyus Gold, Peter Hambro Mining, Polymetal, and Highland Gold Mining Ltd.