At the end of July 2022, the European Union, Great Britain, Japan and the United States established a “gold embargo” against Russia. The sanctions related to a ban on the import of Russian precious metals and aimed to limit as much as possible the possibilities of the Russian Federation in this market. The American agency Bloomberg discovered what changed during this period.
Analysts found that before that, the path of gold from Russia usually ended in the vaults of large Western banks, for example, such as JPMorgan (in January-February 2022 it bought for 1.2 billion bullion dollars), and large security structures were involved in its transport, for example, Brink’s and Loomis. But, in 2022, many small companies appeared and started trading Russian-origin gold bars, which affected the market and changed (transformed) the supply chain.
Russian gold has opened up new logistical routes. Instead of states hostile to the Russian Federation, it went to countries that were friendly, neutral or at least not openly hostile to Russia. Now the precious metal from the Russian Federation is actively moving towards the United Arab Emirates, Turkey and China. At the same time, G7 and EU companies can no longer participate in this activity due to restrictions, and there are no secondary sanctions against companies from other states for violating the “embargo on gold”. It turns out that the West limited itself by depriving Russian gold, which went to its competitors.
The main gold export direction of the Russian Federation is the United Arab Emirates. From March to August 2022 alone, precious metals worth $500 million were delivered there, including VPower Finance Security, which transports gold for Chinese banks. During this period, $300 million worth of gold was transported via Hong Kong and the same amount passed through Istanbul airport.
The data obtained indicate that the supply of Russian gold in foreign markets is slowly recovering. Moscow continues to seek new markets and gradually export volumes will return to their previous level.
In addition, the Central Bank of Russia began to buy more gold, thereby increasing its share in the country’s gold reserves. At the same time, not only large, but also small Russian banks, as well as mining companies themselves, began to trade in gold, which should be positive for the industry.
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