Switzerland, one of the biggest central hubs for precious metal refining has relaxed its stance on sanctions placed on Russia. Switzerland's customs data shows that the nation has imported gold from Russia (which entered via the UK), for the first time since the geopolitical war began earlier this year. In fact, more than 3 tons of it have entered the Swiss market. The Russia-Ukraine war had limited gold supply, pushing the price of gold to all-time highs in recent years.
How Sanctions Affected the Price of Gold
Ever since Russia invaded Ukraine, the fallout of the tension has had a domino effect on global economies. The geopolitical tension continues to agitate financial markets and global supply chains that continue to drive commodity prices gradually higher.
This impact has also affected precious metal markets, as Russia is one of the biggest suppliers of gold. Those who looked to invest in gold fell victim to the price hike, while others who held storage of gold benefited from the metal's increase in value.
Even though precious metals from Russia were barred by the LBMA, no exclusive sanctions were put into place. Irrespective of this, the supply chain disruption led to gold prices breaking above USD 2,000 an ounce just after the Russia-Ukraine war began. Gold has a highly complex relationship with US interest rates, which has increased the opportunity cost of holding bullion.
Swiss Imports Gold from Russia
Custom's information shows that Switzerland imported 3.1 tons of gold, which entered from the UK, worth over USD 200 million. As one of the biggest refining hubs, the gold imported accounts for around 2-3% of its total gold imports.
This was the first Russian gold import for the European nation since earlier this year. The London Bullion Market Association (LBMA) removed Russia from its accredited list, barring the country from trading in the European market after western sanctions.
Four of the largest and most renowned refiners in Switzerland, MKS PAMP, Metalor Technologies, Argor-Heraeus, and Valcambi, claimed they were not involved in the imports. According to customs, a large percentage of the gold that was registered as being for refining or other processing indicated a Swiss refinery, other than the larger four, took the gold.
Despite the surprising turn of events regarding the import of precious metals, the legislation and sanctions of Switzerland do not forbid the import of Russian gold into the country. The Swiss government only asks investors to refrain from investing in gold from Russia. As the war between Russia and Ukraine continues on, chances are, that owners of gold will continue to benefit from the metal's high prices.