Breaking News: Russia Grows Gold, Fx Purchases by 600+%.
Sell season repealed?
(GoldFix News)— Gold is up $20 this morning. This is likely the reason. Today Tass News reported a significant increase in Russian Gold buying for its next fiscal month. This could trigger the biggest seasonal rush into Gold ever
Russia is set to spend $1.9 billion on foreign currency and gold purchases between September 6 and October 4, according to the country's Finance Ministry. The daily allocation will be 8.2 billion rubles, or $92 million.
In total, the ministry will allocate 172.9 billion rubles ($1.9 billion) under Russia's fiscal rule. The purchases will run over the next month, with consistent daily transactions.
For context, in the previous period from August 7 to September 5, the Ministry had earmarked 24.65 billion rubles for similar purchases, with daily buying set at 1.12 billion rubles.
The increase is significant on multiple levels, not the least of which is the coming BRICS summit hosted by Russia this year from October 20th to Oct 22nd. See: BRICS Gold (and Silver!) Launch Date is October 2024 for more
Other coincident factors include the largest short portion held by Bullion Bank swap dealers of all time which ostensibly makes the banks vulnerable to rallies in Gold Price.
Also for the last six years or so, September has been the month of poorest returns for Gold where it averages down 3%. See: Bloomberg: Sell Season Started, What it Means for more.
This announcement, if fulfilled will certainly have an effect on the price of gold headed into the BRICS event as well as the runup to the US Presidential election. If the historical storm between September and October is weathered, it could be the the biggest “Buy Season” ever.
See: Analysis- Biggest “Buy Season” Ever: for more
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Here is the TASS news story
Russia to allocate $1.9 bln for purchases of currency, gold from September 6 to October 4
Daily volume of purchase of foreign currency and gold will equal 8.2 bln rubles
MOSCOW, September 4. /TASS/. Russia’s Finance Ministry will allocate 172.9 bln rubles ($1.9 bln) for purchases of foreign currency and gold within the fiscal rule from September 6 to October 4, with daily purchases equaling 8.2 bln rubles ($92 mln), the ministry said in a statement.
"The amount of funds allocated for purchases of foreign currency and gold totals 172.9 bln rubles. Transactions will be carried out from September 6 to October 4, 2024, respectively, daily volume of purchase of foreign currency and gold will equal 8.2 bln rubles," the statement reads.
From August 7 to September 5 the Finance Ministry planned to allocate 24.65 bln rubles for purchases of foreign currency and gold within the fiscal rule, with daily purchases equaling 1.12 bln rubles.
So what are the reasons they would pre-announce these purchases? Seems counterintuitive to me. I get the BRICS angle - showing leadership, etc - but what else is going on here?
So is sell season over and quickly into BUY season? 😁