Russia’s Gold Market is Huge and is Likely to Grow Larger
Russia is one of the countries with the most potential for future growth when it comes to gold investment. As a gold producing nation, Russia has a natural affinity for gold, and many Russians currently invest in the yellow metal.
For most of Russian history, gold has been a sign of wealth, stability, and economic progress. This has been reflected in the country’s position as the world’s biggest buyer of gold in early 2020. Despite this, there is lots of room to grow.
The gold market is still underdeveloped when compared to other financial markets, although this is likely to change in the coming years.
Russians Love Gold
It isn’t a surprise that according to the World Gold Council (WGC), 79% of Russians are considering investing in gold and at least 66% of them consider it one of the best methods to fight inflation and protect themselves from currency fluctuations.
The public’s existing perception of gold makes Russia a country with potential for an increase in gold investment. Knowledge of how to invest in gold is still an obstacle, but it can be easily solved.
Providing potential investors with information and support to educate them on gold investment would open the country even more to the global gold market. As Russia is already a leading nation for gold investment, added demand would likely push prices higher.
Different Types of Investors
There are four main types of retail investors that the WGC identifies, and each type is defined by how diversified a portfolio is, their risk avoidance, and their attitude toward gold.
The first group is composed of investors the WGC calls “Agile Strategists”.
These investors have a long-term view of the markets, diverse portfolios, and tend to be early adopters. In this group, 55% of the investors consider gold purchases. According to this group the biggest issue with making gold investments are the high buying and selling fees, as well as concerns about authenticity.
“Adventurous Traders” are part of the second group. Unlike Agile Strategists, these investors take short-term positions, are less risk-averse than other groups, and experiment more when it comes to investing. 52% of these investors consider gold investments, with gold prices and concerns about safe gold storage being their main concerns.
The group with the highest percentage of members that consider buying gold are “Cautious Savers”, who are known for being risk-averse, look for steady returns, and aiming to hedge for economic fluctuations.
Of the Cautious Savers, 60% consider buying gold, with the biggest obstacles toward investing being affordability and storage, which matches the adventurous traders’ perspective.
The last group, called “Guided Risk Takers” by the WGC, are those who look for high returns in the short term. While not entirely risk-averse, they are known to rely on third-parties when it comes to decision-making. In this group 55% consider buying gold, and they cite affordability and storage as the main barrier to actually making a gold investment.
Targeting the obstacles perceived by each group is sure to attract more investors by facilitating gold acquisition, and many of these concerns are simple to address.
Creating Opportunities for Gold Investment
Based on the research from the WGC – it is easy to see that there is massive room for more gold investment in Russia. A big part of realizing that potential will be to streamline the gold investment process by dropping transaction costs and increasing transparency.
There is renewed interest in gold with many major investors entering the sector. As more retail investors realize what is happening to the global economy, gold investments both in Russia and internationally are likely to ramp up.
Russia is one of Liemeta’s Key Markets
Liemeta provides excellent solutions to buy investment grade gold delivered directly from the refineries, and to store safely in one of Europe’s most secure and purpose-built private vaults in Liechtenstein.
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