Quotes of the new instruments are set in Russian rubles per gram and trades are settled in RUB.
This week marks another historical announcement from the Moscow Exchange – starting today the clearer’s FX Market trading platform will allow settling of transactions of Gold and Silver on the Moscow Exchange.
The central counterparty and clearing house is going to be the National Clearing Center. The announcement follows last week’s that the first physical gold ETF in Russia is starting operations and is expected to further elevate Moscow’s role as a major financial hub. The Russian market in itself is big enough to warrant the cost effectiveness of offering precious metals, and some former Soviet republics might be interested in the announcement too.
Kazakhstan and Russia have been amongst countries that are actively diversifying their ample FX reserves into physical gold and local investors do not fall back a long way in being keen in acquiring precious metals for their portfolios. Gold and silver trading will be settling between 10:00 and 23:50 Moscow Time Zone (UTC+04:00). The Exchange has stated that should the demand for precious metals be sufficient they plan to introduce Platinum and Palladium trading in the first quarter of next year.
Trading in precious metals on a Russian exchange has been in the works since the mid 90’s, yet it has happened only now. It is great news for Russian investors that they are not that dependent on settlement prices on the London Metal Exchange and have full-fledged ability to settle trades between themselves. The possibilities for Russian retail investors to trade gold are so far limited – the banks are offering gold bars that are subjected to a VAT tax of 18%. Usually retail investors are choosing the less expensive option of gold coins which are classified under a different regulation and are exempted from VAT.