Russia Issues Export Licenses to Gold Mining Sector

Russia will provide permanent export licenses to gold miners so that they can offer their gold directly to the international market. Until recently, they could only sell it to Russian banks, which in turn sold it on to the central bank. But now that the central bank has Domestic gold purchases have ceased the mines have to look for a new buyer. That process got off to a slow start, because the gold mines had to submit an application for every international transaction. By providing perpetual licenses, this will no longer be necessary in the future.

The Russian central bank was the main buyer of the gold for many years. This chain was broken in March, when the central bank announced that it would no longer buy gold on the domestic market. From now on, the Russian gold mining sector - with an annual production of 310 tonnes - will have to look for new customers internationally. This is expected to take several more months, given the large amount of gold that the gold mining sector is now putting on the market.

Russia to export more gold

"This move puts us on an equal footing with local commercial banks and will improve the market infrastructure. This gives support to an international market in which the demand for gold has increased.", Polyus told Reuters. Polyus is the largest gold mining company in Russia. Other major players in the Russian gold mining sector include Polymetal, Petropavlovsk, GV Gold, Nord Gold and Canada's Kinross. They can also look for new customers with a permanent export license.

It decision of Russia to make its gold mining production available to the international market is striking. A run on precious metals caused a shortage in the gold market. This resulted in higher premiums and longer delivery times. In the United States, the shortage caused a Substantial price difference on the futures market. It is possible that Russia is now making its domestic gold production available to alleviate shortages in the international gold market.

Another possibility is that Russia has been forced to sell more gold due to the fall in the price of oil. That also sounds like a plausible scenario, but the figures from the Russian central bank contradict that. The reserves have been back in recent weeks. Increased. The central bank also added 300,000 troy ounces of gold to its gold holdings in March. The total gold reserve rose to 73.9 million troy ounces, good for a market value of almost $120 billion.

This contribution was made from Geotrendlines