Argentina: Savers increase their investments in gold

Deposit rates are creating nervousness among some investors who are increasing their gold positions. Argentines are buying more gold than ever to protect their savings. The Bank of the City of Buenos Aires, the only Argentine bank that offers gold coins and bullion to investors and savers, is negotiating with mining companies to buy gold directly, as the growing demand depletes supply. The Bank began selling gold to customers after Argentina tightened currency controls in October 2011, selling 280 kilos in the first year for 102.6 million pesos (20 million dollars).

Banco Ciudad is the only Bank left in the gold trade after the government banned the purchase of 99.99% certified pure gold for savings in July. The Bank sells it with a purity of 99.96%. There is a 35% gap in prices to buy and sell physical gold in this Bank, while there is no premium to sell the 2019 bond in the country's dollars in the local market, according to the Open Electronic Market based in Buenos Aires , known as MAE.

The gold sold by Banco Ciudad is not recognized internationally, which makes it difficult to determine its value. Historically, gold has been seen as a store of value, so as long as the options to do so in Argentina are limited, people will continue to buy it.