Looking for an alternative to dollars and euros as a means of saving your money? Take note of the gold coins that National Bank of Ukraine will soon start to mint and sell to the public. The banks promise to sell the coins made of gold and silver as easily as conventional paper currency. Should the Ukrainians be treated for the 'currency rush' and instead pick up the ‘golden illness'?
According to a survey conducted by IFAK Ukraine, one in three Ukrainians (to be precise - 36% of people) less and less believe both in the hryvnia and the euro and the dollar. The same attitude toward paper money is now common for actually the entire world.
Perhaps the major drawback of the American and European currency today is that the U.S. and the EU to solve their economic problems are forced to launch a "printing press", and because of this, the value of their currency declines. Gold mass in the world can not immediately increase at least because it, firstly, is not easy to produce, and reserves of the "yellow metal" on the planet are limited.
Theoretically, the price of gold may be reduced if the economic situation in the world gets better quickly, but given the expectation of the second wave of crisis, possible recession (stagnation) in the U.S. and Europe, this is unlikely. Even more fantastic scenario - sale of gold by one of its largest holders - by central banks, which will increase market supply and reduce price. However, it is exactly the opposite - the central banks around the world cherish the "yellow metal" as the apple of their eye, and actively buy it up. This is done, in particular, by the Central Bank of Russia, Brazil and Canada. The National Bank of Ukraine (NBU) is no exception, and - from the beginning of the year - it has purchased nearly 350 kg of gold more than sold.
Despite the chronic instability in the economy, the fashion for gold among the Ukrainians is not yet massive. Last but not least - because of the specificity of the domestic market. Thus, the price between buying and selling of precious bullions in banks may stand at 20%. Accordingly, in order to get a "plus" it is necessary that the price of gold increase by more than 20%. However, many financial institutions are willing to buy only those bullions that they themselves sold.
The possible control of the gold quality in other banks is worth money. In addition to all this, under the law, if after the sale of gold to the bank an individual received a profit (to be calculated as the difference between the sale and purchase price), one must pay income tax...
The NBU is planning to remove the barriers to the "goldmania" in the country. The central bank will be issuing investment coins made of gold and silver. According to Oleksandr Dubykhvist, head of NBU's foreign currency reserves and open market operations, one can purchase them as easily as, for example, currency. The "chervontsi" will be sold for the hryvnia, through the branch network of the banks to be selected by the NBU (most likely it will be the financial institutions with the most extensive regional networks - such as Oschadbank, Privat Bank, Raiffeisen Bank Aval).
The investment coins will have several advantages against the background of gold bars. It is assumed that operations with the "chervontsi" will not be subject to income tax and VAT, and the difference between the purchase and sale price will not exceed 2-3%. The main attracting factor of the instrument for people is that it can become a real alternative to the so-called "hard" currencies. The investment coins will be a real value that one can "feel" and that can not disappear quickly, as opposed to those same dollars and euros.
With investing in gold there is a rule - the winner is someone who has more patience. The point is that the price of this metal may vary, and - quite significantly. For example, in recent months a range of price fluctuations (up and down) was about 10%. Overall, however, gold has been steadily going up over the last ten years. "This is an investment of up to three years. For example, since 2004 to date, gold has risen in price by nearly 400%. No other freely convertible currency has provided such returns," says Oleksandr Dubykhvist of the NBU.
However, gold, as the object of investing money and keeping savings, will fit the impatient people too.
Since the beginning of the year, the price of gold in the world has advanced by almost a quarter (last year - 30%), and experts believe it is no limit. President of the Ukrainian Analytical Center Oleksandr Okhrimenko said that this year the price of gold would rise no less than last year: "Now, none of the stable banks can offer and provide such rate of returns on deposits. There are predictions that gold price will reach USD 2,200 per troy ounce in the next 2 years".
According to the financiers, if the NBU launches the investment coin market, people's insane attraction to foreign currency will fade away. "If the conversion of gold coins is provided really easy, they will be in demand among people, who will invest in gold their currency," says Pravex Bank Chairman of the Board Serhiy Naumov. Ukrsotsbank CEO Borys Tymonkin believes that the "gold coin" demand will stabilize the foreign exchange market of Ukraine. "This will ease pressure on the hryvnia," the banker predicts.
The volume of the first issue of the investment coins can make 4-5 thousand pieces. They will be issued in denominations of 1, 2, 5, 10 and 20 hryvnias with the weight ranging from 0.1 to one troy ounce of triple nine gold (so that their real value will be much higher). Also it is expected to release silver investment coins, weighing one and two troy ounces.
A certain obstacle in the implementation of the "golden" project might be that initially demand for the coins of the National Bank will exceed supply, for presently the NBU does not possess too large amounts of the "yellow metal" (28 tons at 1.45 billion dollars). However, these gold reserves should rise through increased gold production in Ukraine.
The central bank is planning to engage in with the help of a state-owned enterprise, which the state had vested in - "Sevgeologiya". Gold reserves in the country are valued at 3,000 tons (about 97 million troy ounces), but in dollar terms (at a cost of $ 1,700 per troy ounce) - this more than $ 160 billion.
All these resources are sufficient not only to meet the domestic demand (now in the hands of the Ukrainians there is 50-70 billion dollars), but also to attract the resources of powerful foreign investors.
In addition to the investment coins, the National Bank of Ukraine is also planning to issue "gold" securities - gold rate-indexed certificates. One can buy such gold certificates in regional offices of the NBU, as well as in the network of agent banks. An investor will be using them for some time - six months, one year, two years, three years. After that they are subject to mandatory redemption. However one should not necessarily wait for the repayment, as the agent banks will undertake to redeem these securities and in advance in accordance with the current market rate of gold. So the certificate holders will be able to receive cash equivalent of the amounts owed to them at any time as per their convenience or advantage.