Russia's gold ban largely symbolic in gold market

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Russia's gold ban largely symbolic in gold market

In this photo illustration taken in Moscow, a gold Russian rouble bullion coin is seen.

MOSCOW - A move by Britain, the United States, Japan and Canada to ban new imports of Russian gold is largely symbolic within the global gold market, as Russian exports to the West have already dried up.

Britain said on Sunday that the ban was intended to limit Russia's ability to fund its military operation in Ukraine.

It was not clear whether there was a consensus within the Group of Seven wealthy democracies on the plan, with European Council President Charles Michel and German Chancellor Olaf Scholz saying it needed to be discussed further.

On Monday, gold prices were up 0.5% to around $1,835 an ounce.

Russia is one of the world's largest producers of gold, along with China and Australia.

According to the Russian finance ministry, the Russian finance ministry mined 314 tons of gold last year, accounting for almost 10% of the metal dug up globally. It is estimated that gold is worth around $19 billion at current prices.

Polyus is the country's largest gold producer, followed by Polymetal.

Russian gold miners sold their gold to Russian commercial banks, which are typically sold to the Russian central bank or exported it.

In recent years, the vast majority of Russia's gold was sent to Britain, the world's biggest bullion trade and storage centre.

Britain imported $15.2 billion worth of Russian gold last year, according to UK customs data. Russia has sent some gold to countries like Switzerland, Turkey and Kazakhstan in the past few years, according to Russian customs data.

Russian gold exports to the West have stopped since February 24.

Western governments sanctioned Russia's main gold-trading banks, including VTB, Otkritie and Sberbank, and many international banks, refiners and shippers that stopped dealing with Russian bullion.

On March 7, the London Bullion Market Association LBMA dissolved its accreditation of Russian precious metals refiners, barring them from selling new production in London.

Britain imported 29 tonnes of gold worth $1.7 billion from Russia in February, according to UK customs data on the U.N. Comtrade database. Britain imported just 26 kilograms from Russia in March, the last month for which data was available.

Russia's customs service and central bank have suspended the publication of import and export data and information about state gold holdings.

Buyers for Russia's gold now include Russia's central bank, people inside Russia who want a safe investment, and buyers in Asia, where most countries have not sanctioned Russia, Russian miners, bankers and analysts say.

Since the beginning of the war, Russia's gold exports have been rerouted eastwards rather than westwards, reflecting self-sanctioning from Western world gold market participants, said Julius Baer analyst Carsten Menke.

He said that the consequences of a ban on the gold market are likely very limited.