Russia is dumping US dollars and snapping up gold in an effort to move away from American assets, Bloomberg reports. Vladimir Putin has been amassing gold for a decade now, quadrupling the nation’s bullion reserves, but 2018 marked a record as the country bought 274 tons of bullion worth about $11 billion.
Meanwhile, Russia has seen its US-dollar holdings shrink from 46% of Russian reserves in 2017 to 22% today. Some say Putin wants protection from future shocks and the threat of greater US sanctions, while CCN argues that America’s global sanctions could make the US dollar lose power.
China is also feeling the lure of gold and could even outpace Russia, the Financial Times reported last month. The People’s Bank of China bought roughly 32 tons from December to March as signs emerge that its economy will slow down, per Bloomberg.
Gold is often seen as a “hedge against economic uncertainty,” CCN explains.
While China is the world’s greatest gold producer, it doesn’t keep much—just 3% of its total foreign exchange reserves—and apparently wants to change that. French President Emmanuel Macron said last year he also wants to move away from the greenback, calling it an “issue of sovereignty”:
“So that’s what I want … to build a capacity to be less dependent from [sic] the dollar,” he added, per Bloomberg.