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Russia want a New standard for the precious metals market as an alternative to the London Bullion Market Association (LBMA). This is stated in a letter from the Russian ministry that came into the hands of news agency RIA Novosti this week. The new standard is to be called the Moscow World Standard (MWS) and includes a quality mark as well as a trading platform for precious metals. Russia wants to launch a fully-fledged and international alternative to the gold market in London.
"In order to normalize the operation of the precious metals industry, it is crucial to create an independent international infrastructure that is an alternative to the LBMA in terms of functions. It is proposed that the structure be based on a specialized international exchange for precious metals headquartered in Moscow using the new international MWS standard."
It is worth mentioning that Russia also wants to promote this new platform in an international and monetary context. We have to rely here on an automatic translation from Russian, which suggests that the country wants to fix prices for the national currencies of major BRICS countries and that possible "new units of international settlement" are needed. Russian President Vladimir Putin is said to have previously proposed the latter in the context of BRICS. From the letter:
"There should be a commitment to price fixing in the national currencies of the main member states, or to new units of international settlement, such as the new unit of settlement within the BRICS organization proposed by the Russian president."
It is speculation, of course, but this could be the impetus for a system in which countries can use their gold reserves as a tool to settle the trade balance. That could bring about a fundamental shift in the international monetary landscape and gold Back in the center of the monetary system place.
This new proposal by Russia follows an earlier decision by the LBMA to suspend the accreditation of six Russian smelters withdraw. As a result, Russian smelters can no longer offer gold on the gold market in London and the gold bars of these smelters are less tradable internationally. For example, a number of Swiss smelters have already become more reluctant to melt down Russian gold bars.
The European Union also restrictions to the trade in Russian gold. The latest package of sanctions states that EU member states are no longer allowed to import gold from Russia. As a result, an important market for Russian gold has disappeared. For Russia, this was reason enough to introduce an alternative trading platform and its own quality mark. From the Russian ministry's letter:
"Despite a leading position in the production of precious metals, Russian producers have until recently followed the standards set by the LBMA. However, due to the current international climate, the LBMA licenses of all companies in the sector in Russia were revoked in the spring of 2022. This effectively cripples their operations and is a critical negative factor that threatens the survival of the industry in Russia."
Russia is the second largest gold producer in the world after China with an annual gold mine production of 343 tons. In addition, the country is a major producer of platinum and palladium, precious metals that are mainly used by the automotive industry. In total, the precious metals sector of Russia with all mines, smelters and gold banks accounts for a turnover of about $25 billion per year. In recent years, a lot of Russian gold has gone to the gold vaults of London, where most Western ETFs hold their gold reserves. As a result of the sanctions, Russia is now exporting more gold to Other markets, such as the Middle East, India and China. The country also has the VAT on investment gold Deleted to further develop the internal gold market.
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