Russia’s second-largest lender VTB, hit by Western sanctions over Moscow’s actions in Ukraine, has sold one tonne of gold to customers this month and expects demand to increase, the state-controlled bank said on Wednesday.
Russia scrapped a 20% value-added tax on gold buying for individuals on March 1 as people rushed to park their savings when the rouble sank to record lows. The currency has been hit by sweeping Western sanctions on Russia in response to what Moscow calls its “special military operation” in Ukraine.
State-run VTB said it had received over 200 orders since it started selling gold bars at the start of the month. It said customers most frequently bought one kilogramme bars.
In a situation of “increased uncertainty,” gold allows investors to diversify their portfolios, secure their savings and protect them for future generations, VTB senior vice president Dmitriy Breytenbikher said in a statement.
Purchases of precious metals by Russian households should also reduce the amount of cash flooding the economy, analysts have said.
Gold prices hovered near $1,933.7 an ounce on Wednesday, not far from 2020’s all-time peak of $2,072.50 and up from around $1,800 at the start of the year.
From Monday, Russia’s central bank restarted buying gold from banks at a fixed price of 5,000 roubles ($59.35) per gramme after temporarily suspending purchases from banks in mid-March to meet increased demand for the metal from households.
($1 = 84.2500 roubles)
