Russia Selling Gold to Fill Budget Hole

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Bullion.Directory precious metals analysis 30 April, 2026
By Mike Maharrey
Journalist, analyst and author at Money Metals Exchange

The Russians need it, and they are taking advantage of their extensive holdings to keep their government solvent as it deals with the high cost of war and the impact of aggressive economic sanctions.

Since the beginning of the year, the Bank of Russia has sold 22 tonnes of gold to help fill the government’s growing budget hole. At the current gold price, that amounts to roughly $3.4 billion.

According to official data reported by the Moscow Times, Russia’s gold reserves fell by 0.7 million troy ounces to 74.1 million troy ounces as of April 1, reflecting the Bank of Russia’s selling.

The war, along with falling oil and gas revenues, has strained the Russian government’s budget. The deficit had reached 4.6 trillion rubles ($61.3 billion) as of the end of March.

An analyst quoted by the Moscow Times said the selling will likely continue.

“Sales to finance the budget deficit may continue amid a sharp increase in government spending compared to planned budget figures. Such sales of gold from reserves by the Central Bank of the Russian Federation are quite consistent with what is being done in other central banks, especially of developing countries.”

Specifically, Turkey sold around 60 tonnes of gold in February and March to backstop the lira and cover the rising cost of energy.

Russia put itself in a position to deal with the current budget crisis years ago. The Bank of Russia launched a gold buying spree beginning in 2014. Over the next six years, the Russian central bank increased its reserves by around 40 million ounces (1,244 tonnes).

During this period, the price of gold ranged from $1,100 to $1,500 an ounce.

When the war began, Russia held about half of its reserves in dollar, euro, and pound sterling assets. The other half was in yuan and gold, which remain accessible.

The Russians also made a shrewd move before the invasion of Ukraine, transferring their National Welfare Fund holdings into yuan (60 percent) and gold (40 percent). A RAND Corporation study notes, “This was an indication that Russia was preparing for increased Western economic pressure. During the war, Russia has been using these funds to support the budget.”

Russia’s recent selling reveals just why central banks hold gold. It serves as a long-term reserve free from counterparty risk.

And since its value is recognized around the world, it can serve as an emergency fund – even if you’ve been locked out of the global dollar-dominated financial system.

This article was originally published here

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