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Russian Gold Is Being Sold Under the Ban, But Who Is Buying?

Russian Gold Is Being Sold Under the Ban, But Who Is Buying?

The G7 countries banned the import of Russian gold on June 27, 2022, in an effort to further isolate Russia economically and put pressure on the country to end its war in Ukraine. However, Russian gold is still being sold under the ban, and it is not clear who is buying it.

There are a few possible explanations for why Russian gold is still being sold under the ban. One possibility is that the ban is being circumvented. For example, gold could be being sold through intermediaries or through countries that have not imposed sanctions on Russia. Another possibility is that the ban is not having a significant impact on the demand for Russian gold. This could be because there is still a lot of demand for gold in Asia, where most of Russia’s gold is sold.

It is also possible that the ban is actually helping to boost the demand for Russian gold. This is because the ban has made Russian gold more scarce, which has led to an increase in its price. As a result, some investors may be buying Russian gold as a way to hedge against inflation or other economic risks.

It is still too early to say what the long-term impact of the G7 ban on Russian gold will be. However, it is clear that the ban has not stopped the flow of Russian gold to market. This suggests that the ban may be having a limited impact on the Russian economy, and that it is unlikely to force Russia to end its war in Ukraine.

Who is buying Russian gold?

As mentioned above, it is not clear who is buying Russian gold under the G7 ban. However, there are a few possible buyers.

The Russian central bank: The Russian central bank has been buying gold since the start of the war in Ukraine. In the first quarter of 2022, the central bank bought a record amount of gold, worth $12.5 billion. The central bank is buying gold to replenish its reserves, which have been depleted by the war.
Domestic buyers: Some people in Russia are buying gold as a safe investment. Gold is seen as a safe haven asset, and its value tends to rise when the economy is uncertain. The war in Ukraine has created a lot of uncertainty in the Russian economy, which has led to increased demand for gold.
Buyers in Asia: Some countries in Asia, such as China and India, have not imposed sanctions on Russia and are still buying Russian gold. China is the world’s largest gold consumer, and India is the world’s second largest gold consumer. Both countries have a long history of buying gold, and they are unlikely to stop buying Russian gold, even under the G7 ban.
It is important to note that the buyers of Russian gold are not necessarily doing so to support the Russian government. Some buyers may be buying Russian gold as a way to hedge against inflation or other economic risks. Others may be buying Russian gold because they believe that the price of gold is likely to rise in the future.

Ultimately, the buyers of Russian gold are likely a diverse group of individuals and institutions. However, one thing is clear: the G7 ban on Russian gold has not stopped the flow of Russian gold to market.

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