Chinese banks are running out of gold, while Russia's trade reserves and national reserves are also rapidly declining as both BRICS countries are recording skyrocketing demand for gold despite gold prices setting new records, Kitco News reported.
Local news agency Yicai said that the Chinese Industrial and Commercial Bank's application recorded that gold bars of 5, 20, 50, 100 and 200 grams were out of stock, with only 10 grams remaining in limited quantity.
Similarly, the Chinese Agricultural Bank's app shows that it has sold out 10 and 20 grams of yellow bars, while 100 and 200 grams of gold bars are about to sell out. Meanwhile, the Chinese Construction Bank app only has gold bars invested in 50 and 100 grams. The apps of the Chinese Post Office Savings Bank and the Bank of China both display gold bars in a pre-ordered state, meaning they are not available.
"Although gold prices may continue to increase in the short term, related risks are also likely to gradually accumulate. Investors need to consider different strategies, such as diversifying their portfolios, to effectively mitigate risks based on specific situations," said Wu San, a researcher at the China Banking Research Institute.
The gold shortage comes as Chinese gold prices and world gold prices continue to be at an all-time high. The most recent spot gold price is trading at a record $2,906.44/ounce, up 0. 30% on the day.
Another BRICS country, Russia, is also seeing a decline in gold reserves at both central and commercial banking levels.
Russia's RBC news agency cited data from the Russian Central Bank as saying that gold reserves will decrease by 46.4% in 2024, equivalent to a decrease of more than 33 tons.
According to the Central Bank, Russia's gold reserves fell 23.6% in terms of currency value last year. In terms of material value, the decrease was 46.4%, the largest since the peak of the COVID-19 pandemic in 2020.
RBC reported that physical gold reserves held by Russian banks are currently at 38.1 tons, worth $3.4 billion, or 325.4 billion rubles. Russia's gold reserves are currently at their lowest level since July 2022.
According to the World Gold Council, Russian consumers will buy 75.6 tons of gold in 2024, up 6% year-on-year but 62% more than in 2021, the year before the Russia-Ukraine conflict broke out.
