Russia’s central bank resumed its gold purchases from local banks on Monday, but set a fixed gold price for the precious metal.
The Russian Central Bank said on Friday that from this week the Russian Central Bank will pay a fixed rate of 5,000 rubles ($52) per gram between March 28 and June 30. This is lower than the current market value of about $68.
The Central Bank added that the resumption of purchases will ensure the availability of domestic production and its uninterruption gold.
Two weeks ago, the Russian Central Bank announced that it was halting its official purchases of gold from local banks due to increased demand from ordinary consumers.
This is because the Russians bought gold in March to protect their savings when the ruble collapsed. big banks in Russia A group of consumers reported investing in precious metals and coins.
Sberbank, the largest financial institution in Russia, reported that the demand for gold and Palladium It has quadrupled in recent weeks. At the same time, the Russian Ministry of Finance also referred to gold as one ‘The perfect alternative’ against the US dollar.
Setting a fixed price for gold reminds some analysts of what the United States did during it “Gold standardsYears “. The period between 1879 and 1914 is known as the classic gold coin footer, as a troy ounce of gold represents just under $21. Then in the 1930s, the United States outlawed gold ownership and raised the dollar’s value in gold from $20.67 to $35 an ounce.
This rate remained constant until 1971 when Richard Nixon put a limit on the convertibility of US dollars into gold, meaning that other countries could no longer redeem dollars for gold. In 1973, the gold coin rule was abolished.
“I remember what the United States did in the midst of the Great Depression. For the next forty years, the price of gold was pegged to the US dollar at $35, a fixed price for gold. There is a precedent for this. It makes me think that Russia’s intention will be to link the value of the ruble directly to the value of gold, Precious metals expert at Gainesville Coins says Everett Millman. It seems that setting a fixed rate of rubles per gram of gold is the intent. It is very important when it comes to how Russia seeks funding and manages the financing of its central bank outside the US dollar system.”
Sanctions on Russian gold
Last week, the US Treasury banned all gold transactions with the Russian Central Bank.
“US individuals are prohibited from engaging in any transaction – including those related to gold – involving the Central Bank of the Russian Federation, the National Fund of the Russian Federation or the Ministry of Finance of the Russian Federation,” The US Treasury writes on its website.