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. Last Updated: 07/27/2016

Central Bank Alters Rule For Precious Metal Deals

The Central Bank has changed its procedure for setting the daily prices at which it buys and sells gold, silver and platinum, the bank said in a statement.

The bank said that from Friday, it would use the London morning spot-fixing price as the basis for setting its own prices for gold and platinum, at around 2 p.m. Moscow time.

The new prices will be published before 2:30 p.m. and will be effective until 5 p.m. on the same day.

The bank will buy gold and platinum at a 5.5 percent discount to the London morning fix and silver at a 7 percent discount to the previous day's fix. Previously, it had bought at a 2 percent discount to the previous day's afternoon fix, or, in the case of silver, which is fixed once daily, a 2 percent discount to the previous day's fix.

It will offer gold and platinum at a 0.5 percent premium to the London morning fix, instead of a 2 percent premium to the previous day's afternoon fix. It will offer silver at a 0.5 percent premium to the previous day's fix.

This is the first time the Central Bank has offered to sell the metals since Aug. 28, 1998, when sales were suspended in the midst of turmoil after the effective ruble devaluation on Aug. 17, 1998.

But purchases from the bank were not expected to be high given that the metals are available directly from producers at a more competitive price.

"The prices are rising and falling and we have to protect ourselves against the possibility of an abrupt decline," a Central Bank source said, commenting on the decision.

The source said the pricing procedure could be revised if the government scrapped an export tariff on gold exports, enabling the Central Bank to restart exports.

The government set a 5 percent export tariff on precious metals for six months starting April 28 to boost budget revenues. This forced many banks to abandon their plans to export gold, and to start selling to the Central Bank instead.

But a senior Trade Ministry official said Thursday that the government would examine possibly discontinuing the gold export tariff from Oct. 28.

"Then we would be able to export gold, using it as a form of hedging, and not suffer losses as we do now from buying such expensive gold," the Central Bank source said.

The bank added that even though gold had become dearer, it would continue to buy material offered to it.

World gold prices leapt earlier this week after 15 European central banks agreed to limit gold sales.