Russia would lose billions in revenue from this important export commodity, US President Joe Biden tweeted. The precious metals industry in Germany, however, does not believe that the effects will be too great.
From the point of view of the trade association Fachvereinigung Edelmetalle, the planned import ban on Russian gold has no serious consequences for current market activity. A decision envisaged at the G7 summit – also involving the EU – would have a political and symbolic character, said Managing Director York Tetzlaff of the German Press Agency.
The London Bullion Market Association (LBMA) removed the most important Russian gold refineries from the “Good Delivery List” at the beginning of March, shortly after the start of the Russian war of aggression in Ukraine. “They have effectively been cut off from the western gold market,” said Tetzlaff. The LBMA is a globally significant over-the-counter trading place, where the world market prices for gold and silver are also set.
“Russia already largely excluded”
“The rest are the existing war-related sanctions by the US, EU and others against Russian banks, which include their precious metals trading,” he explained. “As a result, Russia is already largely excluded from the EU and US markets.” In Switzerland, Russian gold bars that were produced after the start of the war are also not officially allowed to be traded.
Only previously delivered and traded Russian bars are still circulating through the London market, Tetzlaff said. “However, Russia can continue to offer gold in other markets because the precious metals market is global.” For example, India and China are the two largest buyer markets for gold. The trade association based in Pforzheim represents the majority of precious metal companies in Germany – from medium-sized companies to global corporations.
According to the information, Russia mines about ten percent of the world annual amount of gold. However, unlike palladium, an embargo would not affect the manufacturing industry as much, said Tetzlaff, referring to the automotive industry, which needs palladium for catalysts. In addition, there is more of a supply overhang for gold.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
