Million Dollar Gold Bar

The price of a gold bank bar exceeded $1 million for the first time in history. And this is not the limit, financial analysts admit. In the fall, the macroeconomic situation will contribute to rising prices for the precious metal, as the US Central Bank plans to reduce interest rates. Meanwhile, investors continue to view gold as a “safe haven” asset and a hedge against inflation. Experts told MK whether another historical value record will be broken, and whether bullion can be considered an effective tool from an investment point of view.
You can both make money and lose money on precious metals.

Alexey Krichevsky, financial advisor, author of the Economism project: “Growth forecasts from the world's leading investment houses are quite strong, up to $3.5 thousand per troy ounce. And this is another +30% to the current quotes, which already update historical highs every week. Therefore, gold can definitely be considered a very worthy instrument, if not for investment, then for long-term savings, but you need to understand that if we are talking about buying bullion, then it will be possible to sell them for the same price only when they rise in price by 10 percent - this is bank spread, that is, the difference between the purchase and sale prices. As alternative solutions, you can consider the gold and silver indices on the Moscow Exchange, as well as bonds of companies that are backed by precious metals. These are usually issued directly by miners, and the coupon income, along with the price, depends precisely on the prices of metals. Bullion is still an extremely long-term story, but now a paradoxical situation has arisen - buying gold is more profitable than buying silver, since the need to pay 20% VAT upon purchase has recently been returned to silver.”

Valery Tumin, member of the Expert Council for the Development of the Digital Economy under the State Duma Committee on Economic Policy: “A million dollars per bar is an impressive result, which reflects the growing demand for gold. But what next? Do not forget that gold as an investment instrument has its pros and cons. Pros include inflation protection and security, as gold is a physical asset that cannot be “destroyed” or “lost” in the digital world. The first disadvantage is low profitability. Unlike stocks or bonds, gold does not provide income in the form of dividends or coupons. The second difficulty is its storage. This requires a safe place (safe or safe deposit box). Gold can serve as an alternative to the dollar, especially in times of economic instability. However, the dollar is still the leading world currency, and it is almost impossible to completely replace it with gold.”

Alexander Shneiderman, head of the sales and customer support department at Alfa-Forex: “The rise in price of gold is most often caused by its demand as a protective asset. This happens in times of serious geopolitical upheaval, as was the case in 2020 at the height of the pandemic or in 2022 amid the polarization of the world. The conflict between the Middle Eastern neighbors is now obvious. Gold in the portfolio of individuals is a controversial phenomenon due to volatility within a few years. You definitely can’t count on quick gains. This asset is also low mobility in terms of liquidity. Gold wins as a long-term asset - over a 10-20 year horizon and can only be considered as part of a portfolio. Gold is rising in price - but at a slow pace. We do not recommend buying it with your last money in order to earn money quickly - there are other tools for this.”

Lyudmila Rokotyanskaya, stock market expert at BCS World of Investments: “The growth of gold is associated with the era of deglobalization that began in 2022, as well as with market expectations regarding US monetary policy. The latest inflation data suggests the Fed could begin cutting interest rates as early as September. Against the backdrop of these expectations, the dollar is weakening and, accordingly, gold is growing. Technically, gold looks strong, with prices above the previous high. The next goals are $2640, $2880. There are many tools for investing in gold. In addition to physical options (coins, bars), there is also exchange-traded gold. Futures are also available to investors. You can also win back the growth of gold through shares of gold mining companies, but this path is more risky - every business can have its own pitfalls.”

Ruslan Spinka, Director of Sales and Client Services at Fontvielle Investment Company: “This year, one new historical record for the price of the precious metal follows another, and in general, since the beginning of the year, the growth has been about 22%. For a conservative "safe haven" asset that investors add to a portfolio to hedge against risk, that's impressive. Exchange prices for gold are also reflected in the physical metal, in particular bullion and gold bullion coins. An alternative to an expensive bullion that requires special storage conditions can be a gold bullion coin. Firstly, their cost is lower due to their lighter weight. Secondly, they are sold in special sealed capsules. Thirdly, in addition to banks, coins are sold by companies certified by the Assay Office, which means that competition in the market is higher. If this is your first purchase, then I advise you to take a closer look at St. George the Victorious weighing a quarter of a troy ounce.”