Azerbaijan builds up its strategic gold reserves

As financial history shows, every prosperous country must have gold reserves. Gold was one of few investments that brought profit to the investors during the global financial crisis. The world central banks are expected to have bought about 450 tons of gold in 2011 and the situation will be repeated in 2012, as more and more banks diversify their reserves by increasing the share of investments in gold. Morgan Stanley analysts think that gold will be a more interesting target for investment than stocks or currency in 2012.

Azerbaijan also began accumulating gold mined at its own fields into its reserves, rather than foreign gold bought on the world markets. In late November, Azerbaijan got 3.998.2 troy ounces (124.4 kilograms) of gold mined at the Gadabey field.

According to December 1, the total amount of gold in Azerbaijan kept at the Central Bank, amounts to 16512.9 troy ounces (513.6 kilograms). Its market value is $28.4 million.
The gold mined at the Azerbaijani Gadabey field was delivered and cleared in Switzerland with the profitable part being handed over to Azerbaijan in bars. Earlier, Azerbaijan received 12514.7 troy ounces (389.2 kilograms) of gold of 999.9 standard.

Anglo Asian Mining Plc. gold producer in Azerbaijan plans to deliver 4000-5000 ounces of gold for keeping in the Azerbaijani Central Bank by the end of this year. The market value of gold is approaching $10 million.

A country having gold deposits becomes a currency producer that is recognised by other countries and any business entities regardless of their place and role in the global community. Gold is rightly called a 'currency without borders'.

Many Azerbaijani small and medium gold deposits may arouse interest of foreign investors who are able to provide the necessary technology and capital even in the case of average gold prices. Moreover investment risk is lower than in the whole region. A low level of state regulation of the industry, as well as a more liberal and stable economy may be referred to as being one of Azerbaijan's advantages.

If gold prices remain at the same level or even increase over the next few years, we can predict further growth in business activity in the Azerbaijani gold mining industry from both domestic and foreign investors.


Ellada Khankishiyeva /Trend/