Ukraine to issue gold, silver investment coins

Former Soviet republic of Ukraine is considering to mint more gold and silver coins and made it available for general public.

According to Ukraine’s National Bank, launching of investment coins made of gold and silver will allow people looking for an alternative to dollars and euros as a means of savings.

The coins can be bought by Ukraine’s local currency, hryvnia, through the branch network of the banks to be selected by the centralbank .

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 .

Also it is expected to release silver investment coins, weighing one and two troy ounces. 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.

The investment coins will have several advantages against the background of gold bars. It is assumed that operations with gold coins 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.

Analysts said more people lost faith in paper currencies after major economies like the US and the EU starting to issue more currencies into market resulting in sharp decline of the value of these currencies.

They said that kind of a situation is out of question as far as gold is concerned as gold mass in the world can not immediately increase at least because it, firstly, is not easy to produce, and reserves of the it 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 in the U.S. and Europe, this is unlikely.

They argued that selling gold directly by the central banks will increase market supply and reduce price.

Ukraine’s gold consumption is very low compared to some other nations in the region and because of the specificity of the it’s market the price between buying and selling of precious bullions in banks may stand at 20%. – Bullion Street

Tags: Silver, silver coins

Posted by Silver Guru on Dec 23 2011. Filed under Silver Analysis. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry