Russia is selling off gold reserves at a record pace: how much have stocks decreased?
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Russia’s central bank has been selling gold from its reserves for the tenth straight month to cover the state budget deficit. Since December, the precious metal’s reserves have shrunk by about 62 tons, the biggest sell-off in decades.
This is reported by The Moscow Times.
This year, Russia’s budget deficit could reach 7.3 trillion rubles, more than double the original plan. One of the reasons for the financial difficulties is the decline in oil and gas revenues, which is forcing the government to use its accumulated reserves more actively.
According to the Central Bank of the Russian Federation, in September alone, the country’s gold reserves decreased by another 200,000 troy ounces — about 6.2 tons. At the beginning of October, 72.8 million troy ounces of gold remained in the reserves. This is the lowest figure since the end of 2019.
Russia has only reduced its gold reserves faster than the current pace during the 1998 financial crisis, when the country declared default, faced a currency collapse and a collapse of the government bond market. Then, in three months, the Central Bank sold 3.8 million troy ounces of gold — about 118 tons. However, by the end of the year, some of the reserves were bought back, so for the whole of 1998, their reduction was about 50 tons — less than during the current period of sale.
After the crisis, Russia gradually increased its gold reserves. At the beginning of 2022, they reached approximately 74 million troy ounces, or 2.3 thousand tons. At that time, the country ranked fifth in the world in terms of gold reserves.
Why is Russia selling gold?
According to Reuters, the current sell-off is related to the so-called mirroring of the Russian Ministry of Finance’s operations with the National Welfare Fund (NWF). The ministry uses the fund’s assets to cover the budget deficit, while the Central Bank conducts corresponding transactions with gold on the market.
Alexander Potavin, an analyst at the investment company Finam, explained that due to the fall in oil and gas revenues, the Russian authorities are spending their accumulated reserves more actively. According to him, selling gold can also help the Central Bank compensate for the lack of foreign exchange liquidity. An additional factor could be high world prices for the precious metal.
China is increasingly buying Russian gold
Amid the sell-off of reserves, Russian gold exports to China are increasing. According to Chinese customs, about 100 tons of gold of Russian origin arrived in Hong Kong in January-July 2026 — three times more than in the same period last year. At the same time, these data do not indicate that all of this gold came from the Central Bank’s reserves.
After the closure of the London market, the world’s largest gold trading venue, Russian suppliers of the precious metal reoriented their exports eastward. Gold flows to China increased sharply in the first year of the full-scale war against Ukraine.
According to estimates by the Financial Times, Russian gold worth a total of about $35 billion has been exported through Hong Kong since then.
It was previously reported that Russia plans to spend record amounts of money on the war against Ukraine for several more years. To find the money for this, the Russian authorities want to raise taxes, take some of the excess profits from large companies, and sell confiscated assets.
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