Traders betting Russia's next move will be to sell gold

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By Debarati Roy
Bloomberg News
Tuesday, December 16, 2014

NEW YORK -- Russia's surprise interest-rate increase failed to stop the plummeting ruble. The next weapon available to repair economic havoc caused by sanctions and falling oil prices: selling gold.

Russia holds about 1,169.5 metric tons of the precious metal, the central bank said last month. That's about 10 percent of its foreign reserves, according to the London-based World Gold Council. The country added 150 tons this year through Nov. 18, central bank Governor Elvira Nabiullina told lawmakers.

Russia's cash pile has dropped to a five-year low as its central bank spent more than $80 billion trying to slow the ruble's retreat. The currency's collapse combined with more than a 40 percent tumble in oil prices this year is robbing Russia of the hard currency it needs in the face of sanctions imposed after President Vladimir Putin's annexation of Crimea. A fall in gold prices signals that traders are betting that the country will tap its reserves. ...

... For the remainder of the report:

http://www.bloomberg.com/news/2014-12-16/traders-betting-russia-s-next-m...



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