The Bank of Russia (CBR), the country's central bank, expanded its gold reserves by $350 million last month to $48.229 billion, according to official data from the monetary authority. Gold accounted for 13.3% of its total reserves at the end of June, compared to 9.7% in June 2014. On the other hand, Russia has been steadily reducing its holdings of some other assets, including US Treasury bills.

Gold hoarding may serve as a buffer against volatility in the financial and commodities markets. Russia continued to boost its gold reserves in June despite the recent fall in prices of the precious metal.

Gold miner stocks have broken below their 2008 to 2014 support. Gold appears to have lost $1180/oz which has been a key support level for two years. The monthly chart shows that the next strong support levels are $1040 and $1000.

With an additional 604 tonnes of gold purchases announced last Friday by the People's Bank of China since its last revision in 2009. Yet world gold prices sank over 4% on Monday to hit new 5-year lows during Asian trade. The market, in short, is treating China's 604 tonnes of extra gold like the People's Bank was a heavy seller, not a buyer.



The slide towards and below $1100 will only encourage more short selling.