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Russia's biggest bank notes surging demand for gold
By Dmitry Sergeyev
Wednesday, February 11, 2009
MOSCOW -- Russia's biggest lender, Sberbank, saw retail precious metal accounts double in 2008 as people rushed to protect their savings in a time of financial and economic crisis, a bank official said on Wednesday.
Russians opened 170,000 new accounts which track the price of precious metals last year, taking the total number of such deposits at the state-controlled bank to around 300,000, said Vladimir Tarankov, the director of Sberbank's currency and non-trade operations department.
"We have clients who bought 200-300 kilograms of gold and a 10-kilogram gold coin only spent two days in our safe," he said.
The instability of Russia's 1000-plus banking system, a 30 percent depreciation of the rouble against the dollar since August 2008 and double-digit inflation have left Russians seeking lasting value for their investments.
Sberbank sold the equivalent of 55 tonnes of precious metals in 2008, including 40 tonnes for precious metals accounts, and the peak of sales came in the second half of the year when the global crisis gripped Russia with full force.
Russians are not alone in their rush for gold. Investors and ordinary people all over the world are buying precious metals to hedge against currency volatility.
The U.S. mint sold 2.6 tonnes of popular Golden Eagle Coins in January 2008, or four times as much as during the same period of 2007, Russian Vedomosti daily paper reported on Wednesday.
Tarankov said Sberbank has never seen such a great demand for Russian investment coins as in 2008.
"Gold coins are simple and clear and we have an order for as much as 3,000 coins from one client," he said.
"If you bought gold in the end of last October and sold it yesterday, it could give you a return of almost 58 percent" in roubles, Tarankov said.
In dollar terms, such an investment would have made around 30 percent.
As the global financial crisis seems far from its end, the demand for precious metals remains strong, Tarankov said. This January Sberbank's retail clients purchased the equivalent of 6 tonnes of precious metals.
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