Sberbank CIB will enter the Chinese gold market

Sberbank CIB will enter the Chinese gold market

Investment division of Sberbank, Sberbank CIB plans to register on the Shanghai gold exchange, Bloomberg reported the Bank press service. Thus, Sberbank CIB will become the third Bank to attend the Chinese gold market: earlier this year it came out, banks VTB and “Discovery”.

The Shanghai gold exchange, the largest trading centre of gold in Asia and one of the largest areas in the world where the turnover of metals in real terms is measured in tens of tons.

As explained by Bloomberg, Russian banks, acting as intermediaries between the gold producers and the end buyers expect to take advantage of the growing Asian market. Income growth and a low number of potential targets for investment to stimulate demand made of gold jewelry, bars and coins.

China is one of the largest consumers of gold in the world. In 2015, gold consumption in the country grew at an annual rate of 3.66%, to 985,9 T. In particular: 2.1% to 721,6 t — in the jewelry industry, by 4.8%, to 173,1 t — gold bars on 78,1%, to 22.8 tonnes — gold coins, 3.5%, and 68.4 t — industrial demand. In July 2016 on the stock exchange was trading gold at 1.7 trillion yuan ($255 billion) — almost twice more than the year before.

Russia ranks second in the world in terms of gold: last year it amounted to 290 metric tons. Traditionally, the Russian metal producers sold it to local banks such as Sberbank, VTB and “Discovery” to avoid the expense of exports, but also because banks offer more attractive rates than the market average, the Agency said the financial Director of the company “Polyus Gold” Mikhail Stiskin and Chairman of the Russian Union of Gold producers Sergey Kashuba.

This year, according to kashubians, banks under the pilot sales can send to China a few tons of gold. A month ago the “Opening” reported plans to sell this year 5 tons of gold. VTB in April announced the intention to sell 80-100 tons annually, but without specifying plans for 2016.

On 22 September, gold prices reached the highest level in the last 12 days after the Federal reserve kept its benchmark interest rate at the level of December of last year, $1334,6 per ounce.

Sberbank CIB expects that economic conditions will remain favorable from the point of view of prices on gold and expects that in the medium term gold will trade at a price above the us $1.25-1.3 thousand per ounce.