Gold price crash costs Russia and China US$5.4 billion in just three weeks
Singapore (Aug 6) Gold’s meltdown has cost Russia and China about US$5.4 billion. That’s the value of the two countries’ gold reserves that has been wiped out in less than three weeks as prices slump to five-year lows, dragged down by expectations for higher U.S. interest rates and a stronger dollar.
Bullion’s tumble is especially painful for Russia and China, the biggest buyers of gold over the past six years. China has expanded its holdings by almost 60 per cent since 2009, while Russia more than doubled its assets and added reserves last month as prices fell another 6.5 per cent.
Neither the Greek debt crisis nor China’s stock-market rout has been enough to boost gold’s appeal as a haven. Higher rates curb bullion’s allure because it doesn’t pay interest, unlike competing assets such as bonds.