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Gold emerges as the prime substitute for international tender, declares Deputy Finance Minister

Russian demand for gold remains consistent, according to Deputy Finance Minister Alexei Moiseev, as reported by TASS. Gold now serves as the sole viable investment option...

Gold deemed as the sole viable substitute for foreign currencies, according to the Deputy Finance...
Gold deemed as the sole viable substitute for foreign currencies, according to the Deputy Finance Minister's remarks.

Gold emerges as the prime substitute for international tender, declares Deputy Finance Minister

Russia is witnessing a surge in demand for gold, particularly smaller 50-100 gram bars, as domestic consumers seek affordable and accessible investment options amid economic instability, high inflation, and limited alternative investment choices. According to Aleksey Moiseev, Deputy Minister, this trend is evident in Goznak's sales data.

The high demand for gold bars is transforming Russia’s gold market. The local consumption of gold is significantly increasing, consuming a substantial share of Russia’s annual gold output, which stands at around 300 tons. This surge in demand is prompting Russia to shift its precious metals trade dynamics, especially after Western sanctions in 2022 limited its access to traditional markets.

One of the key drivers of this shift is the increase in exports to major buyers like China. Russian precious metals shipments, including gold, rose by about 80% to $1 billion in the first half of 2025, making China a primary destination for Russian gold ores and concentrates.

Igor Sechin, CEO of "Rosneft", reported on June 21 that the demand for gold is confirmed by price dynamics. Sechin's report does not specify whether the comparison includes inflation or other economic factors, but it suggests a long-term increase in the demand for gold.

In response to this trend, Russia is considering developing a domestic gold exchange to reduce reliance on Western price benchmarks, support de-dollarization efforts, and better reflect domestic market conditions for gold trading.

The price of a 100-gram gold bar was 850,000 rubles at the end of June, as stated by Goznak. Sales of 50-100 gram bars are increasing significantly, according to the company's announcement, which was made at an unspecified date prior to the current discussion. Goznak also announced its plan to sell nearly a ton of gold to Russians by the end of 2025.

Despite the focus on smaller gold bars, demand also exists for larger gold bars, such as kilos and 12 kg bars. However, the affordability and accessibility of smaller bars seem to cater better to individual investors during times of economic volatility.

According to Moiseev, economic rhetoric positions gold as the only reliable alternative for savings over foreign currency. This view is shared by some economic rhetoric, which sees gold bars as a reliable alternative for savings.

Since 1950, an ounce of gold can buy 4 times more oil, 9 times more steel, and 35 times more wheat, as reported by Sechin. These statistics underscore the relative stability of gold's value compared to other commodities.

This surge in domestic demand for gold is contributing to the resilience and transformation of Russia’s gold market under current geopolitical and economic pressures, including Western sanctions and shifts toward eastern trade partnerships.

The surge in domestic demand for gold bars is catalyzing a transformation within Russia's gold industry, as the local consumption of gold significantly increases and consumes a substantial share of the country's annual gold output. This trend, driven by affordability and accessibility, is compelling investors to gravitate towards gold bars as a safer alternative to traditional investment choices.

Consequently, Russia is contemplating establishing a domestic gold exchange to diminish reliance on Western price benchmarks, aid de-dollarization efforts, and more accurately reflect domestic market conditions for gold investing.

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