Banks in Russia face shortage of gold bars after huge rise in demand for precious metal

(MENAFN) Following a huge rise in demand for the precious metal, banks in Russia are experiencing a scarcity of gold bars, according to a report by the Vedomosti newspaper on Tuesday, which cited specialists.

Andrey Vasiliev, the executive director of precious metals operations at Uralsib Bank, told the media outlet that supply interruptions resulted from refineries' limited capacity for production as well as rising public demand for gold bars.

He also mentioned that while refineries were concentrated on making bulk purchases of huge bars and were unable to swiftly adjust to shifting market demands, little ingots are more in demand from people. Small gold bar manufacturing is costlier, according to experts. Evgeny Safonov from Promsvyazbank has confirmed that producing one ingot weighing 12 kg is less expensive than producing multiple smaller ones.

In March, the Russian government eliminated the 20 percent value-added tax on gold purchases made by private citizens as investors hurried to store their funds as broad Western penalties were being implemented. The 13 percent income tax on revenues from the selling of gold bars was also removed in June. Since then, the demand has increased.

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