Russia Continues to Grow Gold Reserves

According to recent buying trends, gold seems to be quite the hot commodity in Russia and its neighboring countries. Just last September, Russia bought a hefty 34.2 tons of gold to add to its reserves. For about the past 10 years, Russia has increased its gold reserves at an average pace of about 300,000 ounces per month - more than tripling its reserves since 2005. Other formerly Soviet countries seem to be following a similar pattern.
  • Some of Russia’s recent gold purchases include:
    • 30.5 tons in March 2015
    • 28 tons in August 2015
    • 34.2 tons in September 2015
  • Kazakhstan purchased about 2.1 tons of gold in August 2015, marking the 35th month in a row that the country expanded its gold reserves (which now sit at an estimated 210.2 tons)
  • The Republic of Belarus purchased 47.1 tons in August 2015
  • The National Bank of Ukraine added 30,000ozt. of gold to its reserves in September 2015.

What’s with Russia’s focus on increasing the size of its gold reserves? Most experts agree that these countries are hedging against the dollar – which you may recall, is a major factor in determining fluctuations in gold pricing and demand. However, Russia is likely getting an additional benefit to protection against a devalued dollar. Remember, Russia is one of the world’s top-producers of gold. By domestically mined gold, Russia can keep that gold from entering the international markets while increasing the size of its reserves at the same time. This not only reduces dependency on the dollar, but boosts the value of the Ruble as well.

Currently, Russia has the world’s 7th largest gold reserves, but if it keeps up this pace, it may move up – but only in the unlikely event that it can outpace China.

The Conflict-Free Gold Standard: What is it & Why it Matters: Part 1

Concerned with potential links between gold and humanitarian conflict in politically unstable geographic areas, the World Gold Council (in conjunction with consultation from every point in the gold supply chain and foreign governments) created the Conflict-Free Gold Standard in 2012. The CFGS is a common approach by which gold producers can assess and provide assurance that their gold has been extracted in a manner that does not cause, support, benefit or contribute to human rights abuses, breaches of international humanitarian law, or unlawful armed conflict. In other words, this operational framework helps ensure that this critical resource is collected safely, legally, and ethically.

Similar to “blood diamonds,” the gold industry getting mixed up in civil conflict is a huge issue. Fortunately, the Conflict-Free Gold Standard (which builds on other efforts like environmental and health and safety standards) provides a transparent methodology that reassures refiners, buyers, and even everyday-consumers that the gold they’re dealing with hasn’t contributed to human rights abuses. But it’s not just the gold industry that benefits – regions where the gold is sourced also benefit.

For countries with human rights issues and/or violence, these problems are not usually encompassing the entire country. Rather than avoiding the country entirely, companies can follow the Conflict-Free Gold Standard to ensure that they work in the country and contribute to its economy without contributing to armed conflict or human rights abuses. When responsibly undertaken, gold mining and refining can have a positive impact on the socio-economic development of countries in the form of:

  • employment opportunities
  • tax revenues
  • improved infrastructure 
  • increased foreign direct investment and foreign exchange

In our next blog post, we’ll explain how the Conflict-Free Gold Standard provides guidance for companies on how to mine gold responsibly around the world.

Tips for Building Customer Loyalty

Returning, loyal customers are practically life-blood for the small businesses here in the Diamond District. Well-done marketing and advertising will encourage new customers to give your business a shot, but only good experiences and authentic relationships will encourage them to come back. As we’ll explore in this blog post, earning loyalty from your customers requires a deft touch with both marketing and customer service.

Your “brand” can be boiled down to two essential elements.

  • how you engage with customers
  • what experience customers can expect you to deliver consistently

Product quality is important, but ultimately, customers will most strongly remember those two things when thinking about doing business with you again. If the relationship you build with a customer is meaningful, if they feel valued, and if you provide a high level of service, they’re sure to return.

If you read around the MGS website and our social media profiles, you can see first-hand how we try to communicate the things that make doing business with us a great experience. We talk about the speed which we process transactions, our high payouts, our transparent refining process, and our flexibility in working with all customers and all sizes of lots. All of these add value to our services – enhancing the experience customers get.

So far, it’s working. Not only have we been in business for 30+ years, but the majority of our customers are repeat business. The next time a prospective customer walks through your doors, think about what kind of experience you can give them that they can’t get anywhere else.