Deputy Finance Minister Alexei Moiseyev told reporters that individuals purchased 95 metric tons of gold in Russia in 2023, or five tons less than in 2022. Most purchases were made in the fourth quarter of last year, when flexible export duties tied to the ruble exchange rate were introduced in relation to gold and a number of other goods.
“We noted two distinct trends during 2023, with purchases of gold bars by individuals declining steadily for three quarters of the year and surging in the fourth quarter. The reversal of the trend coincided with the introduction of the flexible export duties on October 1 – that finding was rather baffling,” the deputy minister added.
According to Moiseyev, the Ministry of Finance has not yet made a final decision on any restrictions on the export of gold by individuals. He said that the ministry continued to monitor the situation to determine whether the sharp increase in private gold exports from Russia was a one-time spike or a new trend.
According to the deputy minister, the demand for bullion gold remains high; market participants note shortages of gold bars of most popular sizes. If the ministry eventually decides to restrict the exports, the restriction will most likely affect the more or less common bullion size, the official added. At the same time, the Ministry of Finance realizes that the restrictions may harm legitimate business, so the agency is carefully considering the issue.
It is difficult to say yet how liquid gold will be when owners try to sell bullion, economist Sergei Khestanov, Associate Professor at RANEPA, says.
“Much will depend on bullion liquidity. With a moderate spread and normal liquidity, gold may well take the niche of a replacement for foreign currency products. The same happened during the NEP period [the Soviet government’s New Economic Policy in 1921-1928],” the expert notes.