Russia Is Hoarding Gold At The Fastest Pace In 12 Years
It doesn't get them a financial system, yet. Here us how it works:
Either way, gold mining plays a critical role in the Russian economy. It is therefore not surprising that the Russian gold market, and the way it is structured, is heavily influenced by official Russian government policy. In addition to the Central Bank of Russia and the Federal Government, a small number of commercial banks, mostly state-controlled, dominate the Russian gold market. These banks source gold from Russian gold producers (upstream), and distribute, sell and export gold (downstream). Most trading in the Russian gold market involves over-the-counter (OTC) trading by these dominant commercial banks.
OTC market with no free entry and exits adds to costs as supply and demand queues are not visible. Need competitive market for gold vaults.
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