12 Amazing Gold Infographics Showing Its Rarity

Post updated: May 28, 2020

A gold bar is a standard form of a certain mass and quality. The word “gold bar” has become synonymous with high-grade gold. In the modern world, mainly products with a purity of 0.995 or 0.9995 and higher are in circulation.

The history of the origin of the gold bar is interesting. As large cities emerged and economies began to develop, a barter system emerged through which people could exchange goods and services. Gold and silver were widely used in various transactions, but their weight had to be checked every time they changed hands.

Approximately around 6.7 centuries BC. e., the inhabitants of Lydia found an original way out of this situation. It was an alloy of silver and gold, the so-called “electrum”.

It was a gold bar of a certain weight (for example, 20 grams) with a state stamp placed on it. The idea was progressive and therefore, about fifty years later, all the main retail outlets in the world began to use a similar practice.

In Russia

The price of gold depends on its purity. For a nugget to become more valuable, it must be processed. To indicate quality, a special value is used - sample.

Gold bullion offered to private buyers is usually 999 fine. This means that 1 kg of alloy contains 999 g of gold, that is, the purity is 99.9%. Lower quality metal is used to make coins. In this case, the buyer will be able to take a product of 900 or 925 samples.

Photo: PublicDomainPictures/pixabay

585 standard is found only in jewelry. If you use pure gold to make chains or rings, the products will turn out too soft. In the investment sphere, high strength is not so important, and an increase in the percentage of foreign metals in the alloy will only lead to increased transportation and storage costs.

Ingots are divided into 2 categories:

1. Measured. They weigh up to 1 kg, are 999 fine and are sold in commercial jars.
2. Standard. They weigh from 11 to 13.3 kg and have a higher purity of 99.95%. Almost never reaches ordinary consumers and is used by large investors such as central banks.

In practice, individuals can only purchase ingots. In financial institutions their weight varies from 1 g to 1 kg.

“The slowdown in the global economy will give many reasons to increase the demand for protective assets... Individuals will not remain aloof from purchases either.
Investments in gold help solve the problem of portfolio diversification and some protection from drawdowns during fluctuations in world markets." Artem Kopylov, analyst at Alfa Capital Management Company. Source: Vedomosti

Where can you buy and sell

Today, not all large banks in the country have a license from the Central Bank to sell gold. As of the end of 2021, bullion could be purchased in:

• Sberbank;
• Promsvyazbank;
• Rosselkhozbank;
• Gazprombank;
• SMP Bank.

Photo: Linda Hamilton/pixabay

The situation with sales is much more complicated: you can only get money for your gold at Sberbank. In this case, the investor will be faced with a fairly large spread - the difference between buying and selling. For ingots weighing 1-5 g it reaches 41%, and for large products weighing 1 kg - 32%. A significant part of this difference arises from VAT, which is 20%.

Note! Another option is to try to take the item to a pawnshop. Sometimes it works out better than at the bank.

Spread plays an important role when making an investment decision. When analysts talk about rising or falling gold prices, they always refer to the market value in $. In practice, a private person will have to conclude a deal on significantly less favorable terms, given the difference in purchase and sale prices by 30-40%.

“You can buy investment coins and bars at dealer banks, but you should still give preference to coins, since in case of their subsequent sale you will not have to pay VAT... unlike transactions with bars” Anna
Bodrova, senior analyst at Alpari. Source: RBC

You can avoid paying VAT by opening a metal deposit in a bank. True, in this case you will not be the physical owner of gold.

Screenshot from quote.rbc: cost of 1 ounce (31.1035 g) in dollars

Thus, the buying and selling price in financial institutions depends on the following factors:

• exchange rate on world exchanges;
• dollar to ruble ratio;
• VAT amount;
• weight of the product.

In Sberbank

First of all, let's see how much 1 gram of precious metal costs in Sberbank. Today it is the largest Russian bank where you can purchase precious coins and bars. We will give the price for the last day of sale in 2021 - December 29.

Table 1. Cost of gold in Sberbank

Source: sberbank.ru, prices current as of December 29, 2020.

Let's take a closer look at the purchase information. First, let's explain the term “quality”:

• excellent: condition of a new product that can be resold to another client;
• satisfactory: has external defects such as minor scratches.

It is noteworthy that Sberbank buys back any bullion, including those that were sold by other financial institutions. The only condition is the presence of a certificate.

Important : not only the precious metal bar, but also the document itself must be of excellent quality! If the paper is damaged or wrinkled, the bank will calculate the purchase rate at a “satisfactory” rate.

There are no pitfalls when it comes to selling. The client just needs to come to the bank, select a product of the appropriate size and pay the specified amount.

Since standard bars weighing 11 kg or more are not in demand among private clients, Sberbank does not indicate prices for these products on its website. However, if we assume that for 1 kg they are asking 5,639,160 rubles, we can calculate the cost of a gold bar weighing 11 kg. It will amount to 62.03 million rubles.

In other banks of the Russian Federation

Since not all financial institutions post archival information about precious metals, for the relevance of the data, we will take information on the last working day in 2021 or the first in 2021. At Gazprombank, depending on its weight, gold can be either cheaper or more expensive than in Sberbank.

Table 2. Prices at Gazprombank

Source: Gazprombank, prices valid as of December 30 and 31, 2020.

An ingot weighing 1 g at Gazprombank is 22% more expensive, while 1,000 g is 0.4% cheaper.

In other companies, the cost may differ by 3-4%, both up and down. For example, let’s see how much one gold bar costs at Rosselkhozbank and SMP Bank.

Table 3. Prices in different financial institutions, rub.

Source: smpbank.ru as of December 31, 2020, rshb.ru from January 5, 2021

Obviously, the cost of bars from 1 to 20 g is lower in the second bank, heavier products are cheaper in the first.

Dynamics

The exchange rate directly affects the price of bullion in Russian banks. Let's look at the Gold (XAUUSD) futures contract chart to see how the price of the precious metal has behaved since 2021.

Screenshot from investing. Cost of 1 troy ounce over 5 years, $

Let's use the Sberbank archive and restore prices for the last 10 years. The table shows how much 1 g of gold of standard quality cost since 2011. For each period, the quote valid as of December 31 was selected.

Table 4. Cost changes from 2011 to 2021

Source: Sberbank

Let's build a diagram of changes in the price of bank gold.

Chart 1. Dynamics of the cost of 1 g of precious metal for 2011-2020, rub. and $. Constructed by the author according to Sberbank and Central Bank data, as of December 31 of each year

Despite the fact that the price was unstable during the analyzed period, people who bought bullion 10 years ago are benefiting. Especially in ruble equivalent. The value in dollars decreased slightly after 2014 due to the sharp fall of the ruble, but leveled off by 2021.

Let's see how the situation has changed throughout the year using the example of Sberbank, where we take data for the last day of each month.

Table 5. Price of 1 g Au in 2021

Source: Sberbank

Chart 2. Dynamics of the cost of 1 g of gold in 2021

In just a year, the price of the minimum bar increased in rubles by 43.5%, while in dollars it was only 20.4%.

“The gold market may grow in 2021 - to the level of $2,000 per ounce.
The growth factor will be the reaction of world authorities to the economic slowdown caused by the coronavirus. Abundant monetary and fiscal incentives will contribute to the rise in price of gold, which will become a haven for investors.” Alexey Kiriyenko, managing partner of Exant. Source: RBC

Keep wealth preservation assets outside the banking system

Gold and silver are wealth preservation assets. Therefore, they should not be kept in a rotten, highly leveraged financial system. Physical gold and silver must be held in the most secure private vaults outside the banking system and the metals must be personally accessible to the beneficial owner.

It is quite clear that owning a share of one or more 400oz gold bars is of no use. Gold investors should own their own bars, preferably in smaller denominations such as 100 grams or 1 ounce.

If gold was ever needed as money or barter, 400oz or even 1kg gold bars would be too large.

Switzerland probably has the best political system in the world and the economy is in very good shape. It's just a shame that the Swiss National Bank and the Swiss banking system have completely abandoned the old type of Swiss banking based on conservatism, service and personal responsibility.

Previously, partners in private Swiss banks were personally responsible for the bank's balance sheet. If all the banks in the world worked according to this model, there would be no financial crisis. Banks would be managed carefully and conservatively.

But instead we have a system in which bank management uses capital hundreds of times if you include derivatives. Profits are then privatized and losses are socialized, i.e. covered by the government or investors. The old Swiss banking model was excellent, but was completely destroyed by the US government persecuting many Swiss bankers and asset managers. Interestingly, no one has gone after the management of all the major US banks, which cost the world $10 billion between 2007 and 2009.

As I said in a recent article, the Swiss National Bank is the world's largest hedge fund, and Swiss banks are too big for the country. Unfortunately, this is a result of the American model, as well as the greed that has taken over the Western financial system.

The Swiss banking system is 5-6 times larger than Switzerland's GDP, which is too much for such a small country. This was the size of the Cypriot banking system when it collapsed in 2013. Unfortunately, Swiss banks are as risky as all large international banks and, in our opinion, are not the place to store large assets.

How it was in the USSR

In the Soviet Union, the price was not tied to the metal exchange rate on international markets. Products were sold at higher prices. The cost of 1 g of 999 sample reached 90 rubles.

At the end of the 60s, the exchange rate of the metal on world markets was $ 1.3 per 1 g. At the same time, in the USSR, 90 kopecks were given for $ 1, although on the black market the rate was 2 times higher. Nevertheless, even with the most optimistic forecast, gold bars in the USSR were worth 30-40 times more than their real price. The purchase could only be made at the Vnesheconombank office in Moscow.

Interesting! The double course was characteristic not only of the USSR. In the 60s, the United States, together with 7 European countries, decided to create a “gold pool”. Its participants had to buy and sell precious metals to stabilize the market price. By the end of the 60s, this mechanism stopped working: the volume of purchases required to maintain costs became too large.

Quality Analysis

In cases where there are no documents for the bullion, or its authenticity is in doubt, it is worth checking its quality. To make a quick quality analysis, a special touchstone is used. For example, they take a gold bar weighing 1 gram and make a line on the stone, then this line is compared with the lines created by standard (not in doubt) alloys of the same standard.

Then a glass instrument, previously dipped in acid, is drawn across the strokes containing gold. The acid leaves a dark mark in the presence of various impurities in the alloy. A darker trace indexes more impurities. Then a comparison is made between the reference strokes and the gold product, and the true gold content is determined. The method is not bad, takes little time and is reliable. Its disadvantage is that it shows the yellow metal content only in the surface part of the product.

Tools for checking the quality of gold.

In other countries

Let's see how much 1 bar will cost abroad. As in Russia, prices in other countries primarily depend on the exchange rate. However, buyers from the US or UK still have to pay VAT or similar tax, which averages 12-20%. Let's look at the current sales rates in America, Great Britain and Germany.

Table 5. Cost of gold bars in the USA

Sources: goldprice.org, current as of 01/08/2021.

Obviously, 1 g will cost the buyer significantly more. The greater the mass, the more profitable.

Table 6. Price of bullion in the UK

Sources: gold-bank.co.uk, current as of 01/08/2021.

As the figures show, 10 g in the USA will cost less, but 1 kg is better to buy in England.

Table 7. Cost of precious metals in Germany

Sources: gold.de, current as of 01/08/2021

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: How to earn passive income by trading stocks. Webinar by Nikolai Ushakov (trading on the stock market for 15 years).

In most cases, prices in the countries under consideration are lower than in Russia. The difference increases as the mass increases. In Germany, the cost is significantly lower in any weight.

Watch the video released by the Business Analysis channel about whether it is profitable to invest in gold:

Author: Victoria Barbayeva. September 24, 2021.

Favorable price for 1 gram of gold in Moscow

Photo: 66.RU from partners
If you want to sell gold jewelry or order a new product without overpaying for the brand, contact the Sapphire workshop. Here they are ready to offer you not only favorable prices for purchasing, but also a pleasant price for the manufacture of various jewelry.

Rings, cufflinks, earrings, bracelets, pendants, chains, etc. — the specialists of the Sapphire workshop are ready to make any of your dreams and ideas come true. They have at their disposal not only modern equipment, but also materials of the highest quality.

Swiss economy is the best in the world

On the other hand, if you look at the economy and political system of Switzerland, you will see that it is probably the best governed country in the world. Just recently I had real evidence of events that do not happen in any other country. The Swiss VAT (value added tax) rate will be reduced from 8% to 7.7% from 1 January 2021. We also received a letter from the landlord of our Zurich office about a rent reduction.

What other country in the world has reduced taxes and rent? Of course not, since everything goes up in line with debt creation and money printing. But not in Switzerland, because it is a well-run country, run by the people, not by an irresponsible government.

The VAT cut was the result of a recent referendum which rejected a VAT increase to fund state pensions. The proposal, supported by the government, was rejected by the Swiss and as a result, instead of raising VAT to 8.3%, it was reduced to 7.7%. In the rest of Europe, VAT reductions are unheard of. VAT started out as a low sales tax in many European countries and gradually increased to levels of 20-27%. But not only has no country reduced VAT, but every time any tax is increased, the people have no say. Taxation in most countries is decided by parliament.

Switzerland's system of direct democracy makes it the best-governed country in the world. The government has less power than in any other Western country. The position of the president changes every year in the seven-member coalition cabinet. The role of the president is ceremonial.

The Swiss Parliament meets 4 times a year for three weeks. Daily sessions are relatively short at this time. That's just the 12 weeks it takes for elected members to "run" the country. This is surprisingly low compared to most other countries in the world. Much of the country's political and financial direction is determined by the cantons (local states), which also receive most of the tax revenue.