The COVID-19 pandemic has triggered some rather unexpected consequences all over the world. In Russia, the current domestic revenue from gas deliveries has plummeted. Income from gold sales, on the other hand, are providing some much-needed revenue.
Russia’s Gas Export Profits Evaporate
It was to be expected that various countries would struggle to generate decent revenue from exporting goods. Demand for most materials is on the decline since COVID-19 forced the entire world into an extended lockdown. With little to no improvement in sight, that situation will not necessarily change in the coming months either.
One of the countries feeling the brunt of COVID-19’s financial impact is Russia. domestic gas export profits have decreased by quite a margin. Gazprom, the country’s primary provider of natural gas to foreign countries, has published its earnings.
Although $2.4 billion in revenue was generated, the amount pales in comparison to gold sales. In fact, Gazprom’s sales hit the lowest point since 2002.
In comparison, Russian gold dealers successfully sold 65.4 tons of gold to other parties. Due to these sales, a total of $3.55 billion in revenue was generated for the motherland.
Contrary to most other assets and commodities, precious metals have performed rather well. Their demand has not decreased by much, as is evident from Russia’s sales alone.
With an active gold mining industry, Russia is in a prime position to deliver precious metals to other parties. Since 2010, the country’s gold production has increased every single year.
Moreover, Russia has a firm spot in the world’s top 10 of gold exporting countries, Continuing this momentum will provide crucial for as long as the COVID-19 pandemic continues to wreak havoc.
It is also worth noting how Russia’s government is the primary buyer of all gold produced domestically As much as two-third of the supply ends up in government hands every year.
Gold Momentum Remains Strong
Aiding the revenue generated by Russia’s gold exporters is the bullish bullion momentum. Barring a few minor blips on the radar, the value of gold has not diminished by all that much. Gold seems to remain above $1,800 an ounce with relative ease, although there will be some minor volatility in the future.
As long as the stock markets remain on wobbly legs, demand for precious metals will not decrease. In fact, it will only increase, as consumers and investors will continue to flock to safe haven assets. Recent volatility affecting Tesla’s stock price confirms that no investment is safe, with the exception of gold, silver, and perhaps cryptocurrencies.