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Gold trading in Moscow could increase after London deal

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(Kitco News) - The world's second-biggest miner (Russia) is set to have a boost to its gold trading exchange after it was announced that Moscow and London will unite. The deal means that Russian producers of the yellow metal can sell directly on its exchange using London market prices with big banks like JPMorgan Chase & Co. and Credit Suisse Group AG providing substantial liquidity. The good news does not stop there as there could be plans to add the same system in Shanghai next year.

The Moscow Exchange has tried to enhance its gold trading in recent years and saw volumes in the first nine months triple from last year’s total on more interest from retail clients via brokers. Igor Marich, managing director for sales and business development at the exchange said “We hope for similar impressive growth in 2022,”. He added, “The Russian gold market has long been purely banking. We want it to be a marketplace for everyone.”.

The new trading and clearance link between the two lets banks, brokers, and non-financial companies trade bullion at London prices. Importantly, clients can also use Moscow-London loco swaps, allowing users to switch gold or silver to another location without physically moving it.

Trading may get even better if Russia cancels value-added tax on retail gold, and the government is working on tracking bullion along the supply chain, which is seen as a condition for canceling the VAT, according to Marich. He noted, “I hope that next year we will see a breakthrough in addressing this very old problem holding back the development of the Russian gold market”.


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