The latest announcement of Russia's budget released on 9/29/24, clearly outlines plans to SIGNIFICANTLY INCREASE PM RESERVES, including the purchacing of SILVER!!
The latest announcement of Russia's budget released on 9/29/24, clearly outlines plans to SIGNIFICANTLY INCREASE PM RESERVES, including the purchacing of SILVER!!
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This marks the 1st time that Russia has explicitly mentioned silver as one of its reserve assets in its budget plan, indicating that silver is beginning to occupy an important position in Russia’s strategic resource reserve planning.
As the central banks purchasing of gold has put an extremely high floor under gold and continues to push gold higher, what do you expect this type of action by Russia and other sovereigns to have on the much smaller market of silver? Exciting times for precious metals investors!
Russia’s central bank announced that it plans to purchase silver as part of its reserves, a move that could significantly raise the price of silver in the coming months.
For at least 20 years until recently, the only precious metal that central banks held in their reserves was gold. Global central banks, in total, have been strong net buyers of physical gold for the past several years. As one example, Poland’s central bank gold reserves now exceed those held by Great Britain.
Recently, Russia’s central bank also started adding platinum and palladium to its reserves. This is sensible as that nation is among the world’s largest producers of both metals.
Two weeks ago, Russia’s Interfax reported that Russia’s Draft Federal Budget for the coming year includes plans for the State Fund, that nation’s central bank, to continue adding gold, platinum, and palladium reserves and, for the first time, also to acquire silver.
Last year, Russia was the world’s eighth-largest silver producer, at 38.5 million ounces. It is far less important to Russia’s economy than the value of its gold, platinum, and palladium industries. In that sense, it might not make sense for Russia’s central bank to acquire silver.
However, this could be a shrewd move. On April 29, 2011, the COMEX closing prices for gold, silver, and palladium were $1,556.50, $48.59, and less than $800. The prices of gold and palladium have far outperformed that of silver since then, meaning that today’s silver price could prove to be a real bargain.
Silver has also seen a dramatic increase in demand in recent years for industrial applications such as photovoltaic, antibacterial, and electrical conductivity purposes. As a result, new and recycled silver supplies have fallen far short of meeting physical demand. The Silver Institute reports and forecasts that from 2022 through 2024, global supplies of 3.030 billion ounces of silver will fall short of meeting demand by a combined 663 million ounces.
In decades past, the US government and the central banks in India and Mexico held silver as part of their reserves. Thus, the concept of Russia’s central bank acquiring silver as part of its reserves is not new. But it could be spectacularly profitable for the Russian government.
If this happens, don’t be surprised if the price of silver jumps at least fifty percent within the next 24 months.
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