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Golden Victorious
The price of gold on the Moscow Exchange has exceeded 8,000 rubles per gram for the first time in history. Since the beginning of the year, metal prices in Russia have increased more than 1.5 times. Prices are steadily rising due to rising gold prices abroad and the weakening of the Russian currency. You can invest in gold by purchasing investment coins. However, these investments have lower liquidity than exchange investments, and the difference between purchase and sale prices is wide, which leads to a longer investment period.
In October, the exchange price of gold on the Russian market exceeded 8,000 rubles per gram for the first time. At Moscow Exchange trading on Monday, October 7, the price reached 8,189.3 rubles per year, which is 3.5% higher than at the end of September. Over the weekend, the price stopped at 8,085 rubles per year, which is 0.7% higher than Friday's close. Since the beginning of autumn, estimates have grown by 11.7%, and the growth since the beginning of the year has amounted to 55%.
The renewal of historical maximums is mainly due to the dynamics of gold prices on world markets. According to Investing.com, the price closed on Friday at $2,674 per troy ounce, which is only $22 below the historical maximum set on September 27. Since the beginning of autumn, prices have risen by almost 7%, or almost 30% since the beginning of the year. This was caused by the reduction of interest rates by the Federal Reserve, the escalation of conflict in the Middle East and uncertainty about the results of the US elections in November.
Gold is a classic safe-haven asset that traditionally rises in price amid geopolitical upheaval, and 2024 will be no exception.
"The current situation in the Middle East is causing anxiety in the markets and is reminiscent of the events of the Arab Spring of 2010-2011, when gold prices soared due to unrest and increased political risks. Investors are looking at gold as a way to protect themselves from the turbulence that has already brought gold to historical highs," says Astero Falcon portfolio manager Alena Nikolaeva.
According to experts, in the current situation, global gold prices may rise further. By the end of the year, prices may rise to $2,700 per ounce, and by 2025, growth to $3,000 per ounce is expected, according to Mikhail Vasiliev, a senior analyst at Sovcombank. “Central banks and investors in developing countries will continue to buy gold next year, as global geopolitical tensions intensify and key dollar exchange rates fall,” said Mr. Vasiliev.
Along with buying bullion, one of the most accessible ways to invest in physical gold is to buy coins, which come in two types: investment and commemorative. The first is more suitable for investment purposes. This is due to the fact that the collection value plays a large role in the pricing of the latter, which complicates the forecasting of income. At the same time, the price of investment coins is similar to the price of the metals from which they are made. These coins are issued exclusively by the Bank of Russia and are minted not only from gold, but also from silver.
The most common investment coin is "St. George the Victorious", with up to 1.2 million coins minted annually. The price of the gold version is 25 rubles (3.11 g gold), 50 rubles (7.78 g), 100 rubles (15.55 g), 200 rubles (31.1 g) and 1000 rubles (1000 g). In 2024, regulators have so far issued coins of only two denominations: 50 rubles and 100 rubles.
As with bullion, the heavier the weight of an investment coin, the less valuable each gram of gold inside it is.
For example, "St. George the Victorious" with a face value of 25 rubles. The price in Sberbank on October 21 is 79,92000 rubles or 10,27000 rubles. For 1 gram, the face value is 200 rubles. It already cost 297,49000 rubles, that is, 9,57000 rubles. Additional discounts are available if you buy several coins (from 10 to 100) per gram instead of one. For wholesale purchases, many banks offer discounts of 5-7%. For less popular coins, such as the "Gold Chervonets", discounts can reach 15%.
However, when making such investments, it is worth considering that the assets are not very liquid. Even in large banks, coins made of precious metals are not available in all branches, and even several branches can sell coins to the bank. For example, Sberbank in Moscow buys coins only in 9 branches. Additionally, it is worth considering that, depending on the bank, the buyback price may differ by 5-25% from the purchase price.
The final buyback price is determined by the quality of the coin and the presence of any defects (scratches, stains, oxidation marks, fingerprints, etc.). To maintain the maximum price, it is recommended to store coins in plastic capsules, do not touch them with your hands, do not wash or clean them. It is worth remembering that if you sell your investment coins more than three years after purchase, you will have to pay personal income tax on the income received. And you will have to do it yourself.