Russia has taken the unexpected step of selling physical gold from its reserves — a major pivot in its fiscal strategy. The move reflects growing budgetary pressure, geopolitical constraints and a broader shift in how Moscow uses its sovereign buffers.
What’s happened
- According to the Bank of Russia (Russia’s central bank), transactions involving gold sales have increased as part of the operations supporting the country’s sovereign funds.
- Previously, much of the gold-reserve movement was “internal” — transfers between state funds and the central bank without actual market sales. Now, Moscow is selling bullion on the domestic market.
- The country’s major sovereign vehicle, the National Wealth Fund (NWF), had about 405.7 tons of gold pre-war; approximately 232.6 tons (≈57 %) has been liquidated since then. As of November 2025, its gold holdings were estimated at around 173.1 tons.
- On Nov 19, 2025 the central bank noted that gold and Chinese yuan holdings represent the liquid assets of the NWF and amount to about US$51.6 billion — or roughly 1.9 % of Russia’s projected GDP.
Why this matters
1. Budget pressure & war financing
Russia has faced steep revenue declines from oil & gas due to sanctions and global shifts. Faced with mounting expenditures, government forces the use of reserves that once lay untouched. The gold sales suggest the Kremlin is relying increasingly on its buffer assets to plug fiscal gaps.
2. Sanctions era and currency strategy
With Western currency assets largely frozen, gold and non-USD/Euro reserves are becoming more critical to Russia’s financial strategy. The shift in reserve composition and the use of gold for budgetary operations underscore Moscow’s adaptation to sanctions frameworks.
3. Global market & signalling effects
- Russia is one of the world’s largest gold producers and holders. Moves to liquidate reserves can affect global bullion supply sentiment.
- It signals that even major reserve-holders may turn to “hard assets” to meet fiscal needs — a sign of stress rather than strength.
- The move may raise questions among investors about Russia’s reserve security and the fungibility of bullion under extreme external pressure.
Risks, uncertainties & limitations
- The exact volume and timing of the gold sales remain unclear — Russia’s disclosures do not fully detail amounts, raises questions about transparency.
- Even with increased operations, the domestic gold market in Russia is relatively illiquid, which can complicate large-scale sales without market disruption.
- While gold is being used for budget support, it remains unclear how sustainable this is. Continued heavy sales could undermine the reserve cushion Russia has built over years.
- For global analysts, it’s ambiguous whether these gold sales are one-off responses to urgent fiscal need or a longer-term shift in reserve management strategy.
What to watch next
- How much further Russia will draw down its gold reserves and at what pace.
- Whether the gold sales start to impact global bullion prices, or lead to domestic stress in Russia’s reserve management.
- How other major reserve-holders respond — will they hold more gold as a hedge, or will Russia’s example caution them from heavy reliance on bullion for fiscal operations?
- The implications for Russia’s macroeconomic stability: if reserves fall materially, pressure on the ruble, inflation, or external vulnerability may rise.
- Any additional disclosures or breakdowns from Russia’s central bank or finance ministry explaining how sales proceed, what buyers are involved (domestic vs foreign) and the end-use of funds.
Final word
The decision by Russia to begin selling off its gold reserves is a notable departure from its previous strategy of accumulation and reserve building. It reflects both the severity of its fiscal and geopolitical constraints and the lengths to which Moscow is willing to go to sustain government spending amid sanctions and war-related demands. For the world, it is a signal that even large reserve buffers are not immune to strategic pressures — and that “safe asset” status may be more fragile than assumed.
