State-controlled VTB Bank, the country’s second-largest lender, said higher demand was coming as the geopolitical situation remained uncertain. Sanctions imposed on Russia for its invasion of Ukraine are hurting the economy and the purchasing power of the Russian ruble.
VTB added that after selling a metric ton of gold to consumers in March, increased interest in the precious metal is expected to continue.
Since it started selling gold four weeks ago, the bank has received more than 200 orders, noting that the most in-demand product is the one-kilogram gold bar. At current prices, this would cost more than US $ 68,000. The bank also noted that the average order weight was about five kilograms. Comex Gold futures for April were last traded at around $ 1,942.00.
Gold gives local investors the freedom to diversify and protect their portfolio during “increased uncertainty,” VTB senior vice president Dmitry Breitenbaker said in a statement.
“Gold has always been a defense tool, showing its best qualities over three to five years. In a situation of high uncertainty, this asset allows you to diversify your portfolio, adjust your savings and maintain capital. for future generations, “said Breytenbikher.
VTB is not the only bank to see gold sales rise. Two weeks ago, Sberbank, Russia’s largest financial institution, said demand for gold and palladium had quadrupled in recent weeks.
The Russians began a spree to buy gold to protect their savings after the invasion of Ukraine. This trend also coincided with Russian President Vladimir Putin abolishing the 20% value-added tax on metal markets on March 9. The new law encourages the purchase of precious metals against foreign currencies in the light of the collapse of the ruble.
In response to high demand, the country’s central bank was even forced to temporarily suspend official gold purchases from local banks to leave enough stock for regular consumers. However, on Monday, Russia’s central bank resumed purchases of gold from local banks, setting a fixed price of 5,000 rubles ($ 52) per gram between March 28 and June 30. This is below the current market value of about $ 68.
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