This Russian bank sold 1 ton of gold in March
(Kitco News) A Russian bank said it sold 1 metric ton of gold to Russian consumers in March as demand surged due to sanctions. One of the most popular products was a one kilogram gold bar.
State-controlled VTB Bank, which is the country’s second largest lender, said the increased demand came as the geopolitical situation remained uncertain. The sanctions imposed on Russia for its invasion of Ukraine are hurting the economy and the purchasing power of the Russian rouble.
VTB added that after selling a metric ton of gold to consumers in March, the increased interest in the precious metal is likely to continue.
Since it started selling gold four weeks ago, the bank has received more than 200 orders, noting that the most requested product is its one-kilogram gold bar. Based on today’s prices, it would cost over US$68,000. The bank also pointed out that the average order weight was around five kilograms. April Comex gold futures last traded at around $1,942.00.
Gold gives local investors the freedom to diversify and protect their portfolios in the event of “increased uncertainty,” VTB senior vice president Dmitriy Breytenbikher said in a statement.
“Gold has always been a defensive tool, showing its best qualities over the three to five year horizon. In a situation of high degree of uncertainty, this asset allows you to diversify your portfolio, secure your savings and preserve capital for future generations. “, said Breytenbikher.
VTB is not the only bank to see an increase in gold sales. Two weeks ago, Sberbank, Russia’s largest financial institution, said demand for gold and palladium had quadrupled in recent weeks.
The Russians started their gold buying spree to protect their economies after the invasion of Ukraine. This trend also coincided with Russian President Vladimir Putin’s removal of the 20% value added tax on metal purchases on March 9. The new law encourages purchases of precious metals against foreign currencies given the ruble’s collapse.
In response to strong demand, the country’s central bank was even forced to temporarily suspend its official gold purchases from local banks in order to leave sufficient stocks for regular consumers. However, on Monday, Russia’s central bank resumed gold purchases from local banks, setting a fixed price of 5,000 rubles ($52) per gram between March 28 and June 30. This price is lower than the current market value of around $68.
Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.