At the end of 2023, gold is in high demand among Russian private investors

At the end of 2023, gold is in high demand among Russian private investors. However, according to Kommersant’s estimates, compared to last year, there was a redistribution of demand between the largest banks. In particular, sales of precious metals at Sberbank decreased, while Promsvyazbank, Sovcombank and Tinkoff Bank increased them. The popularity of gold is supported by expectations of rising prices. However, their real dynamics largely depend on the actions of financial regulators.

A survey of banks conducted by Kommersant showed that private investors remain interested in precious metals. Thus, Sovcombank sold 33 tons of gold worth 177 billion rubles in January-November. Anonymized metal accounts (OMA) accounted for less than 1%. VTB told Kommersant that since the beginning of the year they have sold 30 tons of gold to clients, which is comparable to last year’s figure. Currently, the bulk of the asset portfolio “is made up of physical gold bars – over 62 tons,” the bank noted.

A number of other banks note an increase in demand, although they do not disclose the volume of metal sold. For example, at Promsvyazbank, sales volumes of gold bars this year “significantly exceed last year’s dynamics, and the volume of funds placed on compulsory medical insurance has increased by more than 40% since the beginning of the year.” Tinkoff Bank says sales of gold bars will almost double compared to 2022.

At Sberbank, however, individuals purchased about 15 tons of gold in January-November, while last year it was 18 tons. Based on the bank’s data, clients preferred gold bars: in less than 2023, they accounted for more than 11 tons, while last year – 9 tons.

The price of gold grew steadily on the Russian market in the first half of 2023. By mid-August, its stock exchange quotes returned to the level of 6 thousand rubles/year, exceeding the level at the beginning of the year by 1.5 times. The Moscow Exchange index showed comparable growth over this period. However, in the following months, the rise in gold prices stopped and its value even dropped to 5.5 thousand rubles per year.

“When the price of gold falls, demand usually increases,” noted Sovcombank. Ruslan Muchipov, head of asset management at Tinkoff Bank, associates the acceleration of sales in the second half of 2023 not only with the “action of market factors”, but also with “simplification of the process of buying gold at the bank.”

At the same time, on the world market, gold quotations confidently remain above the level of $2 thousand per troy ounce, and in early December they even updated their historical maximum, exceeding $2.2 thousand per ounce. As Sovcombank notes, “Russian gold is now trading at a discount to the world price, which makes it an interesting product for buyers.”

Since April, citizens can purchase precious metals without VAT not only from banks (introduced in March 2022), but also directly from refineries, as well as from Goznak. Finam Financial Group analyst Alexander Potavin notes that a measured gold bar is “often cheaper to buy from an independent manufacturer”; the discount can be 3–4%.

“But the problem is that when buying bars from independent manufacturers, private sellers, you need to be very scrupulous about quality guarantees for the product and obtain all the necessary certificates,” clarifies Mr. Potavin. Otherwise, he explains, “the banks will not be able to buy back such an ingot.” In addition, the difference between the selling price of a gold bar and the price of buying it from a bank is often 7–15%. So investments in gold should be considered as long-term, and not speculative, experts emphasize.

The long-term dynamics of gold prices is highly dependent on the actions of financial regulators. “If real interest rates fall, we can expect gold prices to overcome the previous historical maximum and rise to $2.2–2.25 thousand per ounce,” Finam believes. Alfa Bank analysts are less optimistic – according to their estimates, by the end of the year the cost of gold per ounce will be $1.9 thousand, by the end of 2024 – $1.95 thousand. On the Russian market, much depends on dollar quotes. In many ways, it was the next requirement for the sale of foreign currency earnings by exporters (see Kommersant on October 24) that led to a decrease in the dollar exchange rate, and at the same time local gold prices in the fall of this year.

Olga Sherunkova