The ongoing conflict in Ukraine has led to a surge in demand for gold among Russians, with many turning to the precious metal as a safe haven asset amidst economic and political uncertainty. The Russian government has encouraged this trend by eliminating the 20% value-added tax (VAT) on physical gold trades for individuals and exempting people from paying income tax on profits gained from selling gold bars.
Russians bought an all-time record of over 50 tonnes of gold bars in 2022.
which is ten times more than the previous year. This surge in demand has led to warnings of potential shortages of smaller-sized bars by banks like Sberbank, which accounts for 80% of gold bars and coins purchased in Russia. The finance minister has recommended investing in gold as an attractive alternative to the “volatile” and “exposed” US dollar. State-controlled VTB Bank sold 33.8 tonnes of gold bars to customers in 2022, with clients holding 50 billion roubles ($711 million) worth of the metal. Even though only banks are allowed to sell bars, personal advertisements of second-hand bars have flooded online marketplaces like Avito.
That’s a lot of private gold ownership by Russian citizens.
I’m really surprised to hear that actually. With the sanctions I can see that happening. I’m surprised at how few Americans own physical precious metals be it gold or silver. I can’t believe that so many Americans don’t even own an oz of any physical metals with the amount of income Americans make compared to the rest of the world. Some of the highest private metals ownership per capita were in countries that are impoverished. It was really quite astounding. Americans spend so much of their incomes and live in debt. They’ll be driving a $50,000 vehicle, talking on an $800 cell phone and what ” fiat” they have is digital on a card. If cash were to be no more than wallpaper overnight and their debit cards were frozen they couldn’t purchase a $.99 pack of peanuts outside of trading off their wedding bands or engagement ring as that’s the majority of precious metals that they own. Quite scary actually.