By Swann Collins, investor and consultant in international affairs – Eurasia Business News, December 6, 2021
The Russian bank entered into the first deals for gold sales in the Indian market. More than 100 kg of the precious metal was sold, in order to supply Indian jewelry companies. Gold was sold at a significant premium to the European market, reported the bank.
Last August Otkritie bank established effective cooperation with Indian partners, which allowed the Russian bank to sell about 40 tons of Russian silver on the Indian market. The conditions for the sale of silver and gold in India are much more favorable compared to European and Russian ones, reports the bank.
The geography of sales of Russian gold and silver in India is extensive. Bars are in high demand in Chennai, Ahmedabad, Kolkata, Agra and Mumbai. India is the second largest consumer of gold in the world after China. Moreover, the Indian jewelry industry accounts for about 70% of the total volume of gold consumed. The volume of production of this metal in India is not high, which determines the premiums of the Indian market in comparison with the Russian and European ones.
The World Gold Council delivered a report in October 2021 according to which in common with investors around the world, Indian savers turn to gold as a hedge against inflation. For each one percentage point increase in inflation, Indian gold demand increases by 2.6%. Cultural affinity, long-held tradition and festive gifting also play a role in the Indian demand for gold.
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Otkrytie’s plans include further development of trade in gold and silver with India. The Russian bank will send precious metal consignments there during periods of increased demand. In addition to India, the bank sells gold and silver in Armenia and Great Britain, and also plans to enter the market of precious metals in Switzerland.
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© Copyright 2021 – Swann Collins, investor and consultant in international affairs.