Metals Attractive during Fin. Instability
Lengthy bear markets on stock exchanges lead investors to look for protection for their investments. Precious metals, especially gold, have been the traditional answer. The research center at BDO Unicon auditing and financial services company found that metals accounts were the most profitable savings instrument for the public in 2007, providing a real income in rubles of 13.7 percent. That high level was thanks to climbing gold prices, which rose 26.4 percent in ruble equivalent, and 37 percent in dollar equivalent. Silver and platinum experienced similar price increases, while palladium rose by 10 percent.
It became possible for individuals to invest in metals five years ago, when banks began offering unallocated bullion accounts. Term and on-demand unallocated bullion accounts tie deposits to the price of precious metals (of which gold is the most popular).Those accounts are offered by Sberbank, the Bank of Moscow, Expobank, Nomos Bank, and Rosbank, Zenith, Soyuz, Uralsib and Centrocredit Banks. Depending on metal and length of deposit, 0.1-7.5 percent interest can be expected on accounts. Deposits can be withdrawn in the form of ingots as well, although, in that case, the withdrawal is subject to 18-percent VAT. Income from metals accounts is taxable and losses from them are nondeductible.
Unallocated bullion accounts are often accessible to the general public. At the Bank of Moscow, for example, the minimum deposit is the equivalent to one gram of metal. Other banks, Zenith, Expobank and Rosbank, for example, require initial deposits of 500,000 to 2 million rubles. Bankers recommend investing in metals on the long term. Metals prices do not rise continually. In the mid-1990s, gold cost about $400 per troy ounce, but had fallen to $250 an ounce by 2000. That price is expected to rise to $1000-1100 in April or May of this year, before settling at $740-810. Prices for platinum and palladium follow gold and silver prices, but palladium prices rise and fall faster than those of platinum.
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All the Article in Russian as of Jan. 23, 2008
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