The Ministry of Finance proposed to store part of the FNB in ​​precious metals

The Ministry of Finance proposed to place part of the funds of the National Welfare Fund (FNB) of Russia in the form of precious metals. This is a protective asset, the ministry explains.

The proposal is issued by amendments to the Budget Code of Russia. In the explanatory note to the project, it is noted that precious metals are traditional “protective” assets. First of all, we are talking about gold, whose share in the international reserves of the Central Bank as of November 1, 2020 amounted to about a quarter of all investments (23.8%). The amendment is needed “in order to ensure their preservation and increase the profitability of the placement of fund funds,” the note says.

The authors of the project emphasize that the initiative is supported by the Ministry of Economic Development and the Central Bank.

• In 2020, one of the main beneficiaries of the pandemic among the assets became precisely gold - in the first six months, gold rose by more than 25% (and by August by 30%) and updated the historical record, exceeding $ 2000 per ration. As analysts explained, in conditions of uncertainty, investors always run into protective assets. During the current crisis, gold gained a serious advantage over the main competing protective asset-US government bonds: due to reducing the Fed’s rate, their profitability fell, and part of the issues became negative.

• Analysts believe that the peak of gold quotations has not yet been passed: Bank of America calls for a price of up to $ 3,000.

• Nevertheless, gold cannot be considered an absolutely reliable asset: the price of gold in dollars fell almost all of the 1990s and in 2012-2015.