China and Russia, two of the world’s top gold-holding countries have been very frank in their efforts to increase their gold supplies, while the U.S. has remained unsure on its actual gold reserves. Russia is now among the top five gold holders after exceeding China, which reportedly holds 1,843 tons. The Federal Reserve claims to have 8,311 tons of gold, but the exact amount has never been verified. Make your gold trading profitable with gold trading signals provided by MMFSolutions
In 2017, Russian obtaining up to the largest part of these imported commodities worth of $12.5 billion from the U.S., with aircraft, automobiles, and medical supplies. The import of cars alone totaled $837 million.
Russian’s Deputy Minister Evtukhov plans on disputing the upcoming tariffs with the World Trade Organization and has suggested other countries limit their imports from the U.S.
In this upcoming trade war with China and Russia, no decisions have been made. where taxes are being used for economic dominance. However, the effects will no doubt be felt on a global level.
Russia has taken financial steps to protect its interest. In April, it sold off almost $5 billion in U.S. Treasuries. This implies bad news for the Federal Reserve, which seriously needs buyers of Russian bonds to finance the increasing debt of U.S.’s.
In addition to 2017, Russia has added 600,000 ounces of gold to its reserves. This gold accumulation has been a Russian trend since 2015. Other countries, especially China, has also been hoarding gold for years. It would certainly create a bullish gold market.
Russia is also the third-largest producer of the precious metal. The government has purchased two-thirds of all the gold mined in a country, buying it from local banks. Reserve diversification is one of the primary reasons Russia buys gold, according to the CBR.
In the case of breakdown of the dollar, Russian and China are well-positioned. It is believed that both countries are considering a gold-backed currency as a hurdle against the U.S. dollar. If that were to happen, the U.S. dollar, which is not gold-backed, could lose its global dominance. While the value of a currency will fluctuate, gold will retain its value. The precious metal has always been an island of stability between economic disorder.
All global currencies will be affected, if a trade war is expected, the chances are everyone will lose. Those countries and investors with gold will survive the confusion. Source