Interfax Report: Russia To Increase Silver Holdings In State Fund

Interfax Report: Russia To Increase Silver Holdings In State Fund

Authored by Chris Marcus

While we've seen a stunning shift in the role of gold in the international financial system in the past 2 years since Russia was sanctioned and kicked out of the SWIFT system, up to this point, it's been a different story in silver.

Because while we've seen central banks set records for the amount of gold purchased, we had not seen any indications of that same kind of activity in silver. Although based on a new report that emerged this week, it's possible that might be changing. 

On Monday, Interfax released a story on Bloomberg noting how the Russian Draft Federal Budget was released, which detailed Russia's plans for buying precious metals in the coming years. And the noteworthy part was that in addition to mentioning plans to purchase platinum and palladium (in addition to gold), the note also mentioned silver.

"The plan is to acquire refined gold, silver, platinum, and palladium to increase the share of highly liquid assets in the State Fund."

As is often the case, available details are scant, and we don't know what percentage of the funds will be allocated to silver. But perhaps more significant than the amount is that this represents the first government or central bank announcement regarding purchases of silver that we've seen in the current bull market.

Keep in mind that if you went back 5 or 10 years in time, there were a lot of people ‘talking’ about gold, but we had not yet witnessed the shift in buying that we've now seen over the past 2 years. So clearly the perception changed, and now is it possible that the government/central bank perception of silver could change as well?

While the metals have a similar profile, they are still different, and of course the majority of the silver is consumed in industrial products. Many of which are green energy products like solar panels. And given the emphasis of governments around the globe to support the green agendas, this creates differences from a government perspective on the ability to use silver as a store of value. 

Yet that doesn't mean that all governments will agree on how to respond, or that there isn't value in holding silver, especially as gold continues to hit new record highs on an almost weekly basis.

Russian President Vladimir Putin also recently talked about potentially restricting critical minerals, and this latest news also comes just a month ahead of the BRICS meeting next month in October.  

So while this announcement doesn't change the dynamics of the silver market overnight, it's one we'll be keeping an eye on. 

Because if it does eventually become a trend rather than just a one-off move, that could become one of the most impactful dynamics to hit the silver market yet.