The price of gold on the Russian market, after a two-year break, consolidated above the level of 6.3 thousand rubles/year.

The price of gold on the Russian market, after a two-year break, consolidated above the level of 6.3 thousand rubles/year. Prices have been growing steadily since the beginning of the month against the backdrop of rising metal prices abroad, where central banks of developing countries are actively buying it in anticipation of a possible decision on the withdrawal of Russian reserves held abroad. In Russia, gold is currently supporting the growth of the dollar.

The price of gold on the Moscow Exchange following trading on March 12 exceeded 6.3 thousand rubles/year for the first time in two years. At the end of the trading session, quotes stopped around 6,307 rubles/year, which is 0.2% higher than the closing value of the previous day. Almost continuous growth continues for the fifth week in a row, during which time gold has risen in price on the Russian market by almost 9%, and since the beginning of the month alone the increase has been about 6%.

The renewal of the two-year high was facilitated by rising gold prices on the world market. According to Investing.com, at the end of last week the price of the metal on the spot market reached $2,195.2 per troy ounce, thereby updating the historical maximum set in December 2023. This week, prices have decreased slightly and on Tuesday reached $2,162.5 per ounce, which is 6.6% higher than the levels at the end of February.

The main driver of price growth, analysts say, was metal purchases by central banks of developing countries.

Financial regulators purchased 39 tons of the precious metal in January, more than double December 2023 purchases, according to the World Gold Council (WGC). The key buyers were the central banks of Turkey (11.8 tons), China (10 tons) and India (8.7 tons). “The main reason for the high demand of central banks for metal is statements by Western countries about their desire to legitimize the withdrawal of Russian reserves,” notes Lyudmila Rokotyanskaya, a stock market expert at BCS World of Investments.

Although the rise in world gold prices determined the movement of metal quotations on the Russian market, the renewal of the two-year maximum became possible largely due to the sharp rise in the dollar exchange rate. According to the results of trading on Tuesday, the exchange rate of the American currency on the Moscow Exchange increased by 1.15 rubles, to 91.78 rubles/$. The weakening of the ruble occurs without any obvious excitement from investors. According to the trading platform, on March 12, the volume of dollar trading amounted to 70 billion rubles, which is comparable to the figure on March 11, but a quarter lower than the average value in February.

There are no obvious reasons for the weakening of the ruble, which may indicate high demand for the currency from large market participants, analysts say.

“Given that the increased trading volume was observed only in the yuan, we believe that this was probably a demand for the currency to purchase imports from the state or business,” explains Sovcombank chief analyst Mikhail Vasiliev. The head of the analytical department of Zenit Bank, Vladimir Evstifeev, admits that some investors decided to “hedge ruble positions during the pre-election week in the Russian Federation.”

As a result of this growth, the global gold market turned out to be severely overheated, so analysts are talking about the possibility of a correction. However, over a longer term horizon, they rather expect stabilization or continued rise in metal prices. “Demand for “substitutes” for money, including the cryptocurrency segment (see “Kommersant” dated March 11.— “Kommersant”), remains high,” explains Vladimir Evstifeev. “This should allow the price of gold to remain near the current highs.” Mikhail Vasiliev admits that the price of gold on the global market will be fixed in the range of $2200–2300 per ounce.

Vitaly Gaidaev