gold Russia Russian banks face gold bar shortages as local demand surges
As Russian investors embrace gold this year, local banks face shortages of smaller troy-ounce gold bars.
The main issue with the current shortage is that Russian refiners are used to supplying banks with large ingots for bulk purchases, as this was the main investment focus in the past, Vedomosti reported. Refiners are already working to shift the production to smaller-sized minted bars, but it is not a quick transition and will take time.
Plus, it was cheaper for refiners to produce 12 kg ingots versus smaller ones that are popular with individual investors, said Promsvyazbank's director of the private capital department Evgeny Safonov. The most-in-demand gold bars with individual investors have been minted bars up to 1 kg in weight. To meet the demand, refiners need to develop the proper infrastructure, a representative of the Moscow Credit Bank was also quoted as saying.Russians have also embraced unallocated metal accounts as protection against risk and inflation. The country's largest lender Sberbank sold 100 tons of precious metals during the first nine months of the year after customers opened 300,000 new unallocated metal accounts.
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