VZGLYAD / Gold owners benefit from the fall of the ruble :: Economy

The abundance of negative news again increases the popularity of gold. The precious metal that fell in price is promised another rise to record levels. In Russia, this asset is becoming even more attractive due to the depreciation of the ruble. And the rise in prices for the main investment coin “George the Victorious” was unexpectedly provoked by the Central Bank of Russia itself.

A new outbreak of the pandemic, the second wave of the economic crisis, instability in Belarus, the escalation of the military conflict between Armenia and Azerbaijan, and even the US presidential election is on the way. All this provides the perfect storm. Investors again remembered gold as a life-saving asset in the event of an economic collapse. Stock bubbles and bad public debt in many Western countries have not yet disappeared.

Analysts at the Swiss investment bank UBS called gold the best investment in the fall and the entire end of 2020. According to analysts, it is not too late to buy gold: after a record rise to $ 2,000 per ounce after the lockdown, gold prices have now fallen to $ 1,880 per troy ounce for futures for October delivery.

“We like gold because we think that by the end of the year its price will reach two thousand dollars per troy ounce. This is a very good way to hedge, ”says the CNBC report. Also, unlike other assets, gold is resistant to the US presidential election.

“In Russia, investing in gold has a double benefit. To the growth of gold in dollars on the world market, and since the beginning of the year it has grown by 25%, is also added to the fall of the ruble against the dollar. We started the year with three thousand rubles for one gram of 999-carat gold, and now the price has risen to 4400 rubles. That is, an increase of more than one and a half times. The numbers speak for themselves, “says Aleksey Vyazovsky, vice president of the Golden Mint House.

And the third – unexpected – factor came to the market. “The Central Bank, which ships our main investment coin, George the Victorious, to the market, has stopped making it. For a month and a half he has not been shipping this coin, and there is a shortage in the market. Nobody knows why the regulator does this, he does not officially comment on this situation. Maybe the Central Bank is saving gold, ”says the source. But this fact led to a shortage of “St. George the Victorious” and a double price increase.

“Now people are stocked with gold bars. But bargains in bullion are subject to VAT. Therefore, gray schemes are quite popular,

in order to avoid paying tax and not overpay every time, “notes Vyazovsky.

The link between the ruble and gold is mediated. However, it is available. “Usually the ruble falls first, then we see a change in the price per gram of gold. Now the price of gold in dollars has dropped a little, a correction is taking place. However, the fall in the ruble partly offset the fall in gold in dollars. As a result, gold has grown in rubles, ”the source explains.

Further, according to his forecast, the correction of the dollar price of gold will end, and it will begin to grow along with the increase in the ruble value.

“The road is open for gold for a new growth impulse. The dollar is a choice in the event of a severe crisis market crash. But, as history shows, the US monetary authorities are rapidly “coming to the rescue”, as it was in March. Therefore, staggering and swaying, but the world economy will recover, pushing ahead of itself the demand for raw materials and interest in insurance against inflation in the form of gold, “expects Alexander Kuptsikevich.

In his opinion, gold is quite capable of recovering as quickly as it fell earlier this and last month. “Now the dynamics are very similar to what we saw during the 2008 global financial crisis. Then gold also fell during the heat of market fears, but in the three years after 2008, the metal has tripled in price from the lows of the year. It is the same now: gold may not only return to historic highs as early as next month, but also reach $ 2,200 per ounce by the end of the year. At the same time, it will not be surprising if this price doubles in the next three years, “says Alexander Kuptsikevich.

The head of the Golden Mint is even more optimistic: “In dollars, I expect to rise to $ 2,500 an ounce this winter. And in rubles, the price of gold may reach the level of 3500-5000 rubles per gram of 999-carat test ”.

The scenario when gold breaks through $ 2,100 again, and then $ 2,200 per ounce until mid-2021, is possible, but not guaranteed, comes from a share of skepticism Vitaly Manzhos, senior risk manager at Algo Capital. This option is possible if the US announces a large new stimulus package ahead of the elections, which will whip up dollar inflation and help the dollar price of gold to rise, he explains. A more moderate scenario – gold prices will stabilize around $ 1800-2050 per ounce by the end of this year, Manjos says.

And, in his opinion, it is too late to buy physical gold and silver in the form of coins at the moment. “Buying physical metal is not a tool for medium-term speculation, but rather a means of preserving capital for a period of several years to a decade. It should not be forgotten that gold prices have been relatively low over the previous seven years as the world recovered from the previous major economic crisis in 2008. In other words, an unsuccessful purchase of physical gold and derivatives on it near a recent or new historical high is quite capable of turning into an unsuccessful investment for a period of several years to a decade, ”warns Manjos.

In addition, it is worth considering the difference when buying and selling precious metal coins. “If this difference is large, then it will not allow profit from a noticeable rise in prices for the precious metal,” the expert adds. In general, all this is true for silver.

For buying dollars and euros, the moment, as you might guess, is definitely not the right time. The dollar on the stock exchange is quite capable of updating the January 2016 maximum of 86 rubles during the fourth quarter, Vitaly Manzhos does not exclude. However, if the Central Bank enters the market with foreign exchange interventions (and it seems to do so) and supports the ruble, then its rate may stabilize. At what level? This is harder to predict. Manzhos talks about a fairly wide range – 70-85 rubles. Kuptsikevich expects stabilization of the dollar exchange rate at 80 rubles in October and further descent in the second half of November.

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