What’s Driving Russia’s Gold Buying Spree (Video)

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Vladimir Putin has been buying tons gold lately, literally. With 1,149.8 tons in its vaults, Russia is the world’s biggest buyer of gold over the last decade. This year is more than following that trend, buying 37 tons in September alone.

The price of gold is falling, and this maybe fuelling the nations gold lust. But with Russian it is more likely that this feverish gold buying is intended to offset the economic damage inflicted from falling oil prices and tough Western economic sanctions. These sanctions are hurting the Russian ruble, and causing more money to leave the country. Russia’s central bank now says it doesn’t expect the economy to see any growth in 2015. Stockpiling gold is a way for Russia to diversify its assets, which is a safe bet economically.

Al Jazeera reports: “Sanctions are blocking Russian mines from selling gold on the international market, so the Russian government has been forced to buy up all that domestic gold.” Not only Russia, but China also has greatly increased its gold purchases this year. According to Bloomberg’s recent survey of economists, there is a 70 percent chance Russia could fall into a recession within the next 12 months.