Russia’s Gold Reserves Dwindle to Multi-Year Lows

Russia’s central bank is selling gold at its fastest pace in more than two decades as the country faces mounting financial pressure from its ongoing war in Ukraine. According to the World Gold Council, the central bank sold another six tons of gold last month, bringing its total sales thus far to 62 tons. 

At the current rate, the country could record its largest annual gold sell-off since 2000, when it sold 79 tons amid a severe economic crisis. 

The country’s gold reserves have fallen to approximately 2,265 tons, their lowest level by weight since 2019. Holdings are now more than 71 tons below the record high reached in mid-2024, signaling a reversal after years of accumulation. 

Russia spent much of the previous decade building its gold reserves, purchasing substantial quantities of domestically mined gold between 2014 and 2018 as Western sanctions followed its annexation of Crimea. The central bank continued accumulating gold after Russia launched its full-scale invasion of Ukraine in 2022. 

However, the recent acceleration in sales suggests that gold is increasingly being used to meet financial needs rather than simply strengthen national reserves. The government has also relied on gold disposals to generate additional funding, with the finance ministry reportedly selling gold since the war began, raising around $17 billion by the end of last year. 

Meanwhile, intelligence analysis from Ukraine suggests that Moscow has already exceeded its entire 2026 budget expenditure by nearly 40%, highlighting the growing cost of sustaining the conflict. 

Russia’s financial challenges are compounded by its exposure to global energy markets. As the world’s second-largest crude oil producer, the country depends heavily on energy revenues. Brent crude prices recently fell for a third consecutive session, falling below $109 a barrel. A sustained decline in oil prices could further constrain government income at a time when military expenditure remains substantial. 

Gold prices have also experienced downward pressure, trading at approximately $4,130 per troy ounce earlier last week, after falling to an overnight low of $4,107. In China, the world’s largest gold-consuming market, prices reached a ten-week low. The narrowing premium over London prices suggests weaker immediate incentives for importing gold into the country. 

Russia’s accelerating gold sales reflect the increasing strain on its financial resources as the war continues. While its remaining reserves provide a significant financial buffer, continued liquidation could gradually erode a stockpile that took years to build.  

The pace of future sales will depend on government financing needs, energy revenues and the broader economic impact of the conflict. 

Gold industry entities like Platinum Group Metals Ltd. (NYSE American: PLG) (TSX: PTM) will be watching sovereign gold reserve sales as the economic toll of the Iran war intensifies since such sales could increase supplies on the market and influence bullion prices. 

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