9.4
7.725 Reviews
English
EN
The London Bullion Market Association (LBMA) has decided to suspend the accreditation of six Russian gold smelters withdraw. This means that from now on, these smelters will no longer be able to offer their gold and silver bars on the gold market in London. Last week, the LBMA already asked all smelters about their ties to Russian entities that are on a sanctions list. And that turned out to be problematic for Russian smelters, because the government has major interests in this sector. In fact, several gold smelters are fully owned by the state.
Last week Wrote that Russian smelters were under a magnifying glass because of Western sanctions. These sanctions affect a number of Russian individuals, companies, banks and the Russian central bank. This also affects Russian smelters, who usually sell their precious metals to domestic banks and the central bank. With an annual gold mine production of 330 tonnes, Russia is the second largest producer in the world and therefore an important supplier to the global gold market. About ten percent of the global supply comes from Russia. Also, the country's mining sector produces 1,350 tons of silver annually, about five percent of global production.
The Russian smelters that have immediately LBMA accreditation Losses are:
The last few years Exported Russia a large part of its gold mine production to the United Kingdom. As a result of the LBMA's decision, the country will have to look for another market, such as China and the Middle East. They will probably still accept Russian gold, especially if the tightness in the physical gold market increases. Also, the central bank of Russia recently announced that it will resume some of the domestic gold production monopolize. Its gold reserves have become more important now that Western countries have blocked most foreign exchange reserves.
The biggest problems are likely to arise in the gold market in London. For example, the world's largest gold ETF (GLD) has added many Russian-made gold bars to its holdings in recent years. Of the total gold reserves, about ten percent have a stamp from Russian smelters. Existing gold bars with a Russian stamp can remain in the vault there, but the new supply will dry up. This means that the tightness in the physical market will increase, especially as investors are flocking to gold ETFs again and funds are expanding their allocation to precious metals. This can lead to higher premiums and longer delivery times. This measure by the LBMA seems to hit the gold market in London harder than the Russian gold sector.
Geopolitical turmoil and fears of an economic crisis have exacerbated the Gold price has risen to record highs in recent days. On Tuesday morning, the price of a kilo of gold to an all-time high of €59,800. In dollar terms, the price rose to more than $2,000 per troy ounce, the highest level since August 2020.
Do you want toBuy gold by means of Gold bars or Gold Coins? We are happy to help you with your order.
Have a look at us YouTube channel
On behalf of Holland Gold, Paul Buitink and Joris Beemsterboer interview various economists and experts in the field of macroeconomics. The aim of the podcast is to provide the viewer with a better picture and guidance in an increasingly rapidly changing macroeconomic and monetary landscape. Click here to subscribe.
