Vitaly Nesis, Polymetal’s Chief Executive, in an interview with economic observer Alexey Bobrovsky, declared return of interest to gold from both large investors and small speculators.
Gold will not replace oil as a speculative asset, Nesis said, commenting on the forecast of the former US Federal Reserve Chairman Alan Greenspan. “The playground is smaller,” said Nesis. The global value of all gold stocks is lower, but the oil storage is expensive. Therefore, both assets will remain speculative for investors in the future, but “oil is a game for big boys”, and gold is an asset for mainstream investors. “Gold is for those who want to play with the first of thousands dollars”, said Nesis. He believes that the demand for gold from the population in Russia is now constrained by the 18% VAT on gold bullions. If the tax situation changes, the population in Russia will buy gold not less than the Chinese or the Indians in their own countries. Many traditional investors have stopped looking at the gold mining companies during recent three years. This year, the traditional British and European investors are back to gold, said Nesis. In the past three years, gold quotes were markedly volatile, but the situation is better this year. The trend on the increase or decrease in the gold price is formed not by large investors, but marginal - those who buy at low price fluctuations, said Polymetal’s boss. Demand of the Gold ETF funds is very volatile and affects the quotes: the prices have fallen due to the outflow of these funds in 2013, and the inflow of gold ETF-funds stabilized the price of gold this year. There is also a political factor this year: the United States elections result in favor of Clinton led to an outflow of gold assets, said Nesis.