More Gold Connections with the Russian spies 'found' earlier this week

IMF’s Gold Assets Shrank in April as Russia’s Rose

http://www.businessweek.com/news/2010-06-30/imf-s-gold-assets-shran...

June 30 (Bloomberg) -- The International Monetary Fund’s gold holdings fell by 15.25 metric tons (490,286 ounces) in May, according to figures from the Washington-based lender. Russia’s assets
expanded by 22.46 tons.

Reserves of gold at the IMF were 2,951.58 tons at the end of May compared with 2,966.83 tons at the end of April, data on the IMF’s website show. Russia increased holdings to 703.1 tons in May,
from 680.64 tons, and has added gold every month since at least
February, the data show.

The IMF plans to sell a total of 403.3 tons of gold. India, Mauritius and Sri Lanka bought 212 tons last year and the IMF in February said it would begin selling the remainder on the open market.
The combined February-to-May sales would leave about 137.5 tons as of
the beginning of last month.

This “is an indication that they will continue to sell the remaining 137.5 tons on-market as opposed to via off-market transactions with other central banks,” said Daniel Major, an analyst
at Royal Bank of Scotland Group Plc in London. “Indeed the decline in
gold sales from European central banks and purchases from India, Russia
and China in recent years demonstrates gold’s growing popularity with
central banks.”

Central banks have been adding to reserves and gold-backed exchange-traded fund assets have advanced to a record as investors sought an alternative to currencies and a protection of
wealth from Europe’s debt crisis. Gold traded at $1,243.45 an ounce at
4:16 p.m. in London and reached a record $1,265.30 on June 21.

China Reserves

Central banks and governments added 425.4 tons to their holdings last year to 30,116.9 tons, the most since 1964 and the first expansion since 1988, data from the World Gold Council show.
Official reserves may expand by another 192 to 289 tons this year, CPM
Group, a research and asset-management company in New York, said last
month.

China increased its reserves of gold by 454 tons to 1,054 tons since 2003, the Foreign Exchange Administration said in April last year.

Russia Buys 22 Tons Of Gold In May

http://www.zerohedge.com/article/russia-buys-22-tons-gold-may

Ten days ago we reported the most recent data on gold reserve holdings as presented by the World Gold Council, where we pointed out that Russia had purchased 27.6 tons
of gold in the most recent reporting period, bringing its total to
668.6 tons. It appears Russia is only getting started. According to the
latest IMF data, in the period between April and May, Russia added
another 22.5 tons, bringing its May total to a fresh record of 703.1
tons. As BusinessWeek reports,
Russia "has added gold every month since at least February." At the
same time, The International Monetary Fund’s gold holdings fell by
15.25 metric tons (490,286 ounces). "Reserves of gold at the IMF were
2,951.58 tons at the end of May compared with 2,966.83 tons at the end
of April, data on the IMF’s website show." Good thing the world's
bailout cop is doing all it can to keep gold prices low by transacting
in the open market instead of in prenegotiated transaction. Again, per
BusinessWeek, this “is an indication that they will continue to sell
the remaining 137.5 tons on-market as opposed to via off-market
transactions with other central banks,” said Daniel Major, an analyst
at Royal Bank of Scotland Group Plc in London. “Indeed the decline in
gold sales from European central banks and purchases from India, Russia
and China in recent years demonstrates gold’s growing popularity with
central banks.” Well, all Central Banks except those that are printer
happy of course, and are now loaded to the gills with toxic debt that
will continue to impair their currencies until the bitter Keynesian end.

Central banks have been adding to reserves and gold-backed exchange-traded fund assets have advanced to a record as investors sought an alternative to currencies and a protection of wealth from
Europe’s debt crisis. Gold traded at $1,243.45 an ounce at 4:16 p.m. in
London and reached a record $1,265.30 on June 21.

While the paradoxical IMF's agenda is all too clear (sell gold, get cash, but help the CB's by keeping price low), that of Russia is even clearer-
never mind all time record gold prices. Buy. In that,
Putin's country is a spitting image of the GLD, which has added almost
a hundred tons of gold in recent weeks, price considerations be damned.

Russian 'spies,' goldbugs and the struggling dollar

http://wallstreet.blogs.fortune.cnn.com/2010/06/29/russian-spies-go...

When federal officials arrested 11 alleged Russian spies yesterday, it seemed natural that the accused agents would be interested in the CIA leadership, the Obama administration and Afghanistan. But who knew
that they were goldbugs?

James G. Rickards, senior director for market intelligence at Omnis, pointed us to the fact that the FBI complaint mentions that the global gold market was one of the key sources of interest of the Russian Federation and its intelligence agency, SVR.

"On a number of occasions, the SVR specifically indicated that information collected and conveyed by the New Jersey conspirators was especially valuable. Thus, for example, during the summer and fall of
2009, Cynthia Murphy, the defendant, using contacts she had met in New
York, conveyed a number of reports to [Moscow] Center about prospects
for the global gold market."

According to the complaint, the SVR responded in November 2009 that the information on the gold market was very useful and had been forwarded to Russia's Ministry of Finance and Ministry of Economic
Development.

If Russia wanted information on the gold market, it would hardly be alone. In 2009, of course, gold jumped 24% in value, closing the year at $1,095 an ounce -- a price that seems quaint now that gold is over
$1249 an ounce, but was still the biggest story in the financial
markets of 2009.

Murphy's alleged tips about the gold market must have been quite powerful. It's impossible to tell how they influenced Russian economic policy or thinking, but we can look at some of Russia's moves at the
time and notice some striking trends that show that Russia dramatically
reversed its stance on gold in late 2009.

Before October 2009, Russia had been planning to sell nearly 25 tons of gold into the market. In November 2009, however, one month after Murphy's alleged report to the SVR about gold, Russia started stocking
up on the precious metal. In November 2009, Russia's central bank
bought more than $1 billion of gold from the foreign exchange market in
order to better control the price of the ruble, central bank deputy
chairman Alexey Ulyukayev told Reuters at the time. Russia also said at
the time that it might buy gold from the state repository, Gokhran.

Critics at the time noted that Russia's move into gold could be interpreted as a manifestation of disappointment with the U.S. dollar and U.S. economic policy under Fed Chairman Ben Bernanke; partly, this
was because, as Russia was buying gold it also stopped buying U.S.
agency mortgage bonds, the Fannie and Freddie bonds that packed over
half of the Fed's balance sheet.

Of course, it's difficult to impute this shift solely to Russia (or Murphy's market tips). Yes, as of this year, the Russian central bank was still buying gold, loading up on 26.6 tons in the most recent
quarter, bringing its holdings to over 668 tons. But Russia is hardly
an outlier. The central banks of several countries have been loading up
on the precious metal, including China, Venezuela and India, which on
its own bought 200 tons in November 2009.

The problem with all the gold buying, of course, is that it often reads as a global central bank reproach to several currencies, but particularly toward our troubled U.S. dollar. As the World Gold Council
wrote in a February report on gold, currencies and the money supply,
"gold exhibits a strong negative correlation to the dollar."

This is where central bank currency moves could get sinister. Rickards wrote a paper, "Economics and Financial Attacks," and created an imaginary Pentagon war game describing a crisis situation in which
Russia used its gold reserves to create a new global currency and
destroy the value of the American dollar. In the May 2009 paper,
Rickards suggested that U.S. intelligence agencies would do well to
track the gold reserves of other countries -- just in case.