U.S. President Joe Biden announced “Together, the G7 will announce that we will ban the import of Russian gold, a major export that rakes in tens of billions of dollars for Russia,” via Twitter. The move comes right after Swiss refiners imported gold for the first time since February. Biden tweeted ahead of the G7 leaders arriving at Schloss Elmau, the luxury resort in the German Bavarian Alps. They are attending a summit about the Russian invasion of Ukraine and the global economic fallout the main focus.
In a statement, the U.K. government confirmed the move by the G7 saying: “U.K., U.S., Japan and Canada will lead G7 to ban import of Russian gold, the country’s biggest non-energy export.”
The move comes as Russia is staring down its first default since the Bolshevik walked away from Czarist Debts in 1918. The rubber is about to meet the road for Russia with regards to its debt payments this Sunday. The grace period on around $100 million of missed bond payments runs out. Whilst there won’t be an official declaration as given the ostracizing of Russia by most of the world it is largely symbolic. Russia disputes the designation as you would expect. Nevertheless, the bond documents are clear, if investors do not have their money by the deadline, there will be an “event of default” on Monday morning.
The west has bans on Russian oil, and extensive export controls aimed at denying Russia crucially needed technology and funds. At the same time Western allies have been sending Ukraine supplies of weapons and ammunitions even as they have refused to directly join the fighting. The rationale is if they do it will be World War III.
The ban follows news last week Switzerland imported gold from Russia for the first time since the invasion of Ukraine in May. Over 3 tons of gold was shipped to Switzerland from Russia in May, according to data from the Swiss Federal Customs Administration. That’s the first shipment between the countries since February.
The shipments represent about 2% of gold imports into the key refining hub last month. It may also mark a change in perception of Russian bullion, which became taboo following the invasion. Most refiners swore off accepting new gold from Russia after the London Bullion Market Association removed the country’s own fabricators from its accredited list.
The London Bullion Market Association removed the country’s own fabricators from its accredited list. that was viewed as a de facto ban on fresh Russian gold from the London market, one of the world’s biggest, the rules don’t prohibit Russian metal from being processed by other refiners. Switzerland is home to four major gold refineries, which together handle two-thirds of the world’s gold.– Bloomberg
Bloomberg reported almost all of the gold was registered by customs as being for refining or other processing, indicating one of the country’s refineries took it.
The four largest MKS PAMP SA, Metalor Technologies SA, Argor-Heraeus SA and Valcambi SA said they did not take the metal.
The sanctions have failed to have Putin retreat which are now occupying large areas of southern and eastern Ukraine. Russian forces failed in an immediate capture of Ukraine when they first attacked in what has become a series of missteps and estimates of 100,000 and more deaths and untold destruction. They now seem intent on conquering and occupying the entirety of Ukraine’s eastern Donbas region.
Source: Twitter, Bloomberg
From The TradersCommunity News Desk