As a global currency, an investment and simply an object of beauty, gold has held an allure for thousands of years. For the investor, that allure is largely due to gold's proven ability to preserve value over time and be a good diversifier within a portfolio.

Gold extraction is one of the leading sectors of the Russian economy. Precious metals are among the most liquid goods and the demand in the world market is stable. Developed nations seek to maintain and replenish their gold reserves, buying gold from producing enterprises on a constant basis. Until 1995, the state was the only gold buyer in Russia. Following the adoption of several laws and Russian Federation Government resolutions aimed at the liberalization of the Russian precious metal market and extension of the list of legal entities and individuals empowered to conduct transactions with gold, the demand for refined gold has been growing markedly (on the part of banks, first and foremost).

In terms of gold reserves, Russia ranks third after South Africa and the United States, or 7-8% of the world's reserves.

The steady growth of gold and currency reserves in Russia induced the international rating agency Fitch to increase their rating of Russia's sovereign debt from BBB to BBB+. Fitch also noted the decrease in Russian state debt to 11% of GDP compared to 34% or the average country with a BBB rating. Fitch's outlook is favorable.

** According to World Gold Magazine, Russian gold production costs are $136-$200/ounce. This is dramatically lower than the world average of $235/ounce.