Kazakhstanis hungry for gold bars as precious metal prices go up

Sales of gold bars have risen twofold / Collage by Kursiv.media (the National Bank and Shutterstock), photo editor: Denis Andreev

In the first quarter of 2024, Kazakhstanis bought 18,900 gold bars of 816 kilograms in weight, twice as much as the same period last year (9,500 bars of 255 kilograms in weight).

The record price surge for gold over the past several months is one of the key drivers of the demand for gold bars. Today, one gram of gold costs 33,200 tenge ($75.03), compared to 30,300 tenge ($68.48) in January.

However, the current price isn’t the highest. On April 18, for instance, one gram of gold cost 34,500 tenge ($77.97), a 14% increase since the beginning of the year. This was the highest price since June 2017. Given that the National Bank of Kazakhstan began collecting this data in 2017, there is no information about gold prices before this year.

According to the regulator, residents of Almaty city acquired the most gold bars (12,400, 66%), followed by people in Shymkent (2,800, 15%) and the Zhetysu region (983 bars, 5%).

Several types of gold bars are available in Kazakhstan: 5, 10, 20, 50 and 100 grams in weight. They are available for purchase and sale in Halyk Bank, Eurasian Bank, Jusan Bank, Bank CenterCredit and some nonbanking exchange shops.

The National Bank launched its program for selling and buying gold bars for the population in 2017. Over this period, 170,500 gold bars of 6.2 tons in weight were sold in total. The most popular form factor for gold is the 10-gram bar. Kazakhstanis bought 43,000 of such bars (25%).

The regulators point out that gold bars can be a reliable tool for investment as banks and exchange shops buy them off same-day for cash. Since 2017, Kazakhstanis have sold 34,500 bars of 937 kilograms in weight or 20% of all bars sold in the country.

Each bar comes with protective elements and a special cover that protects it from physical damage like scratches. It is very easy to check if the packaging was opened. This protective cover is also the quality certificate for a bar. This is why it is recommended to handle a bar carefully and not open its packaging.

Earlier this month, the National Bank of Kazakhstan said that its gold and foreign exchange reserves rose by $1.9 billion to $37.8 billion since the beginning of the year against the backdrop of surging gold prices on the global market. Over the first quarter of 2024, the prices increased by 7% from $2,000 to $2,200 per troy ounce. The National Bank believes that this market volatility has been driven by better-than-expected financial results of the U.S. as well as investors’ expectations that the Federal Reserve would cut its base rate. Moreover, rising geopolitical tensions like the war between Israel and Hamas have also affected the situation on the gold market.

Experts expect that gold prices will continue to grow. For example, Goldman Sachs has raised its target gold price to $2,700 per ounce by the end of this year, while Citibank forecasts a price surge to $3,000 within six months.