The fall of the Russian ruble is helping to spur a demand for safe haven assets like a gold in a scramble to preserve wealth. It puts Russian citizens in a precarious position, but it’s an ideal place for bullish gold investors to be.
With Western sanctions raining down heavy on Russia, they’re wrecking havoc on the local currency. As such, Russians have been looking at ways to stave off the devaluing of their currency by purchasing tangible assets like luxury watches and jewelry.
Of course, luxury items related to gold are also highly sought after. Gold itself is seeing a push higher in the safe haven scramble, causing Russia’s central bank to pause purchases in order to share the wealth with household consumers.
“The central bank’s pause on gold buying follows the announcement just last month that the financial authority would resume purchasing of the precious metal after commercial banks in the country faced sanctions from the West in response to the attack on Ukraine,” a Business Insider report says, noting that Bloomberg cited Russia as the fifth largest owner of gold globally.
“Now, gold has become one of Russians’ last safe havens to preserve their wealth,” the Business Insider report adds. “Previously, some Russians had been buying up luxury items like watches and other jewelry as a store of value to defend against the ruble’s tumble to historic lows.”
A Gold Mining Option to Consider
With so much pent-up demand for gold, there are alternatives in order to get exposure via exchange traded funds (ETFs) that target ancillary services like gold mining. One ETF to consider for this indirect exposure is the Global X Gold Explorers ETF (GOEX).
GOEX seeks to provide investment results that generally correspond to the price and yield performance of the Solactive Global Gold Explorers & Developers Total Return Index. The index is a free float-adjusted, liquidity-tested, and market capitalization-weighted index designed to measure broad-based equity market performance of global companies involved in gold exploration.
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