The gold rush continues in Russia - growth by almost 300% year on year

Over the past three months, the Russians have purchased over 5,5 tons of gold, according to information from the World Gold Council (WGC). This means an increase in demand for ore in this country by as much as 293% compared to the corresponding QXNUMX last year. In the opinion of the Management Board of the Treasury Mint, the increase in demand for gold in Russia, it is probably the result of the war with Ukraine as well as the sanctions imposed on that country by most countries of the Western world. In our part of Europe, the demand for gold was higher by over 12% compared to the second quarter of 2021.

Gold rush in Russia

The World Gold Council released information on gold demand and prices on world markets in the second quarter of 2022. According to the data published by the organization, the global demand for physical investment gold in the form of bars and bullion coins in the second quarter of 2022 amounted to 245 tons - the same as in the corresponding period in 2021. However, this result means a decrease in global demand by 13% compared to the first quarter of 2022, which was significantly influenced by the poor situation on the Chinese market. 

The situation in individual global markets was inconsistent - in China there was a significant (35%) decrease in demand compared to the second quarter of 2021 and a decrease by 24% compared to the previous quarter, which was undoubtedly influenced by the strict policy pursued to contain the COVID virus -19. Blockades, which were introduced in several key cities and regions, were in force for most of the second quarter
and cut off some consumers' access to retail stores. Globally, this situation was offset by the increased demand for gold bars and coins in India (20% compared to the second quarter of 2021), Pakistan (32%) and Turkey (132%). In the United States, demand for gold bars and coins remained at a level similar to the second quarter of 2021. In Russia, the demand for physical investment gold remains high (5,5 tons) and is up by 293% compared to the same quarter last year. 

“Investing in gold is a long-term investment, it will pay off in 10 or 15 years. The supply of this metal grows especially in times of economic crises, high inflation, but also armed conflicts. So the Russians probably chose gold as a result of their war with Ukraine. Gold coins, small bars are easy to sell or exchange for, for example, other goods. The embargo on Russian gold has also been in force since the end of June. Sanctions were imposed by four G7 countries: the US, Canada, the UK and Japan. Poles are also still willing to invest in gold, despite more and more attractive bank deposits. Investments in this metal can start from several hundred zlotys or several thousand, and the purchase of a plot of land or a flat is an expense of at least several hundred thousand zlotys. Not everyone also wants to invest in the stock market or in cryptocurrencies. In turn, bank deposits with an interest rate of 7% mean a loss on capital with an inflation of over 15%. Gold seems to be a good alternative for people who want to buy an easily tradable asset and invest in the long term. - says Jarosław Żołędowski, president Of the Treasury Mint. 

The demand for gold in Europe is declining, but slowly

According to data from the World Gold Council, despite a decrease of 14% compared to the previous quarter, the demand for investment gold in Europe remains high - 68 tons. As for individual European markets, despite a decline by 10% compared to the previous quarter, Germany turned out to be the strongest again - demand amounted to 41 tons, which means a decrease by 8% compared to the second quarter of 2021. 

On smaller European markets (the so-called other Europe, to which Poland belongs), a total result of 7,9 tons was recorded, which is a thirteen percent decrease in demand for physical investment gold compared to the previous quarter, but at the same time means an increase by 12% compared to In the second quarter of 2021. 

The price of gold in Q1,871 averaged 3 USD / oz, i.e. 2021% more than the average for Q2022 6. However, it decreased compared to the first quarter of 1 (XNUMX%), but in the first half of the year it strengthened slightly (+ XNUMX%). The weakness in QXNUMX depended on the unstable value of the dollar - the price of gold varied depending on the currency in which it was denominated.