Russia taps physical gold reserves for first time in 24 years
The Central Bank of Russia (CBR) has begun selling physical gold from its sovereign reserves for the first time in nearly a quarter-century. The move aims to cover a federal budget deficit that has ballooned to over 18.5 trillion rubles (approx. €182.4 billion) since 2022.
The regulator sold 300,000 ounces of gold in January, followed by another 200,000 ounces in February. These sales reduced Russia's total gold holdings to 74.3 million ounces, the lowest level in four years.
Fiscal pressure mounts
According to World Gold Council data, the 14-tonne liquidation marks the largest two-month bullion sale since 2002. For decades, Russia primarily used its gold for minting coins rather than budget financing.
The strategy changed in late 2025 when the CBR announced "mirroring operations" involving the National Wealth Fund. The Finance Ministry is now liquidating assets to fund record military spending, which has reached levels unseen since the Soviet era.
Shifting from virtual to physical
Until recently, gold operations were largely "book-entry" transfers between government accounts. The physical metal remained within the national reserves, which are the fifth-largest globally.
Now, the CBR is offloading physical bars on the market, mirroring its recent sell-off of Chinese yuan. Analysts Alexandra Prokopenko and Alexander Kolyandr suggest this shift indicates a desire to preserve remaining yuan liquidity.
The yuan remains Russia’s primary tool for currency intervention. However, the exact size of these remaining reserves remains classified following the freezing of $300 billion in Western-held assets.
Translation by Iurie Tataru
