By John Meyer, financial consultant, for Eurasia Business News, April 2, 2022
Russian bank VTB sold the first ton of gold bars to customers in March. The bank launched a new product for Russian customers, amid high inflation and Western sanctions.
Since the start of sales of gold bars, Russian bank VTB has received more than 200 applications from customers. Most often, customers purchase ingots weighing 1 kg. The average weight of the transaction is 5 kg.
“Historically, gold has always been a protective tool, showing its best qualities on the horizon of 3-5 years. In a situation with a high degree of uncertainty, this asset will allow you to diversify the portfolio, fix your savings and save capital for future generations. Buying gold bars with VTB is now convenient, fast and profitable, since the cost is formed on the basis of a market quote with a minimum spread, “commented Dmitry Breitenbicher, Senior Vice President, Head of VTB Private Banking and Privileges, in a press release published on March 30.
The minimum volume for the purchase of gold bars in Russian bank VTB is 1 kg, the maximum is 26.6 kg. Measured gold bars of the highest 999 fineness, produced by Russian refining plants, can be purchased by individual order.
Customers can pay for the precious metal both in rubles and in foreign currency, within the framework of the new Russian law No. 55-FZ, signed by the Russian President Vladimir Putin on March 14, 2022.
VTB bank expects that the demand for gold will grow further in the background of the abolition of 20% VAT from March 1 on the purchase of gold by individuals in Russia.
Read also : How to invest in gold
All the necessary certifying documents are issued by the bank for each purchase. The receipt of the gold bars themselves is available in the bank’s vault. Customers can pick up physical gold or leave it in the bank for safekeeping – the service is provided free of charge for three months, reported the Russian bank.
The Russian central bank, ten days after its decision to suspend the purchase of gold from Russian commercial banks to meet the demand of the population for this asset, resumed these operations on March 25.
The Bank of Russia also announced that from March 28 to June 30, 2022, it will buy gold from Russian banks at a fixed price of 5000 rubles per gram, which is less than $ 1800 per troy ounce.
In the situation of the deep shock of foreign exchange liquidity that the Russian banking system is now experiencing, gold will once again serve to store value and protect wealth against inflation. Demand for gold from Russian citizens has increased since the start of the military operation in Ukraine on February 24.
In early March, Russia amended its Tax Code adoptiong a law abolishing VAT on the purchase by individuals of precious metals in bullion with their withdrawal from bank vaults. Previously, the VAT tax rate was 20%.
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