$9 billion worth of gold coins sold
As the uptake of gold coins after their introduction midyear increases significantly, 35 per cent of the coins have been bought by individuals while 65 per cent have been bought by corporates including asset management and insurance entities.
Rudairo Mapuranga
Through a press statement on the resolution of the Monetary Policy Committee meeting held on 23 September, the Reserve Bank of Zimbabwe (RBZ) said a total of 9516 Mosi-Oa-Tunya gold coins valued at $9 billion had been sold as of 23 September 2022.
The central Bank was happy with the uptake of gold coins which contributed to curbing inflation.
“The Committee noted, with satisfaction, the improved market confidence and uptake of gold coins as an alternative investment product to holding US$. A total of 9516 gold coins valued at ZW$9 billion had been sold as at 23 September 2022, with 35% having been sold to individuals and 65% to corporates, including asset management and insurance entities,” The RBZ Governor Dr John Mangudya said through the press statement.
In August Dr Mangudya announced that smaller Zimbabwean gold coins, as small as a tenth of an ounce, are expected to go on sale in November from the Reserve Bank of Zimbabwe.
According to Mangudya, the smallest coin containing just over 3.11g of gold, will, according to the current gold coin price, cost US$188.48, or local currency equivalent at the interbank rate.
“Following the successful launch of the gold coins on 25 July 2022 and in response to public demand, the Bank shall introduce and release into the market gold coins in smaller units of a tenth ounce, quarter ounce and half ounce for sale with effect from mid-November 2022. The features, characteristics and the sale terms and conditions shall remain the same as the current trading arrangements of the gold coins in circulation,” Dr Mangudya said.
The RBZ last month introduced gold coins, known as Mosi-oa-Tunya, onto the market as a store of value.
The gold coin, weighing one troy ounce or 31,1 grammes, with a purity of 22 carats, is available for sale in both local and foreign currencies at a price based on the prevailing international price of gold and the cost of production.
The gold coin, which is sold with an accompanying bearer certificate, has characteristics which include, Liquid Asset Status; Prescribed Asset Status; Can be used as collateral; is Tradable, and Can be bought back (after 180 days) at the instance of the holder.
The price of the gold coins is determined by the London Bullion Market Association (LBMA) PM to Fix the gold price plus a margin of 5% to cover the production and distribution costs. The price of the gold coin on the date of the initial release, 25 July 2022, was US$1,823.80 or ZW$805,745.35 in local currency. Fluctuations will be experienced on the US$ and ZW$ prices as a result of the movement in the international price of gold and the exchange rate.