Data released by the World Gold Council last week showed central banks, led by Poland, China and Russia, bought 374 tonnes of gold - the largest acquisition of the precious metal on record by public institutions in the first half of a year. Central banks accounted for nearly one-sixth of total gold demand in the period.

The pattern advances on last year’s activity in which central banks hoovered up more gold than at any time since the end of the gold standard (where a country could link the value of its currency to the precious metal) in 1971.

The shift in attitude towards gold since the financial crisis was highlighted by a European Central Bank decision last week to cease an agreement to limit sales of gold, as the region’s institutions are no longer selling it in large volumes and are instead now net purchasers.

Russia gold buying: Putin's HEAVY gold buying 'BAD SIGN' for WORLD PEACE

RUSSIA’s gold buying hit its highest level in six years in the first quarter of 2019. An expert is now warning Russian President Vladimir Putin’s heavy buying of the shiny metal is a “bad sign” for world peace.

PUBLISHED: 15:17, Tue, May 21, 2019 | UPDATED: 15:17, Tue, May 21, 2019

Russia has been stockpiling gold for years, but hit a six-year high in the first quarter of 2019, the World Gold Council (WGO) reports. Russia became a whole lot shinier as it increased its reserves by 145.5 tons from the beginning of the year until the end of March. The massive amount is a 68 percent increase from the same period in 2018.

Adrian Ash, Director of Research at BullionVault told Express.co.uk Mr Putin’s heavy gold buying is a bad sign for world peace.
He said: “Heavy gold-buying by governments or central banks is rarely a good sign for world peace and co-operation.”

Moscow’s stockpiling of gold comes as they drastically attempt to reduce the central banks US Treasury holdings, as well as to “de-dollarise” the nation.
By doing so, Russia protects its own interest from a potential fall in the world economy and gold is often considered as a hedge against any fall in value of the US dollar.
However, although Russia is the biggest gold buyer in the world right now, they are only the fifth-biggest holder of gold in the world.

Mr Ash continued: “Despite quadrupling in size since 2009, Moscow’s gold holdings still represent less than 20 percent of its total foreign reserves.
“That compares to 75 percent for the United States and 50 percent for Western Europe, so there’s room to increase.”
But the director added: “Russia is already shaking up the global gold market, because in 2018 Moscow bought almost all of Russia’s gold-mining output, now the third largest behind China and Australia.

“That’s helping support the gold price by keeping a big chunk of new supply off the market.”
And if the purchasing of gold continues in the same pace, it may move past France and Italy and enter the top three gold-holders within a year.

Mr Ash said: “The golden rule is that whoever owns the gold has the power.
“While gold hasn’t had any official role in the monetary system for nearly 50 years, it’s no coincidence that the United States remains by far the largest national holder.

“To match the size of US holdings, Moscow would need to keep buying Russia’s entire mine output for the next 20 years.
“Gold tends to do well when other assets do badly. So like any central bank Russia holds physical gold because it offers security and spreads risk.
“Moscow also sees gold as a way to limit US power by reducing its exposure to the Dollar.”