After Russia expanded its gold position by a record amount of more than 274 tons in 2018, the country appears to continue that trend in 2019 with 31 tonnes of gold purchases in February.
Dollars For Gold
The trend and the ways in which Russia, among others, continues to expand its gold reserves is remarkable. One of these ways is that Russia uses dollar bonds to purchase gold. This could be interpreted as Russia's central bank anticipating on a possible dollar crisis and acting accordingly.
Farfetched Scenario
And it isn’t a strange thing to think about converting our dollar into gold. The economic sentiment in the United States is showing cracks. There are a number of indicators that we at GoldRepublic could show to prove this scenario isn’t all that crazy.
1. Fed President Powell says the US economy will slow down
2. The number of jobless claims in the US rose to its highest level in 10 months.
3. ADP (NASDAQ:ADP) showed the lowest number of new jobs in the US in the last 18 months.
4. Carsales are slowing down significantly and had their worst quarter since Q4, 2014.
5. Retailers are again having a particularly rough time and the number of job layoffs in the US is increasing.
Interest Rates QT And QE
With a low interest rate and the promise of the Federal Reserve to raise interest rates only once in 2020 and to stop Quantitative Tightening (QT), some analysts are even speculating that we might be seeing a new round of Quantitative Easing (QE).
Precious Are The Metals
Gold, silver and platinum are already taking advantage of the growing uncertainty in the dollar and the economy of the United States. Precious metals once again show that they are a safe haven when uncertainty grows. Something that we at GoldRepublic believe that gold and silver have been doing for 5000 years.