Moscow Turns to Gold Sales Amid Fiscal Strain
Facing a sharp drop in oil and gas revenues and a massive budget shortfall, Russia has begun liquidating portions of its gold reserves. According to Ukraine’s Foreign Intelligence Service (SZRU), the Central Bank of Russia sold approximately 21.8 metric tons of gold in the first quarter of 2026, reducing its total holdings to 2,305 tons. This marks a reversal from years of accumulation: the Kremlin shifted from buying to selling in November 2025, when it became clear it needed to plug a budget deficit nearing $62 billion. Proceeds from these sales are being converted mainly into Chinese yuan, as Moscow’s access to hard currency through international markets remains effectively blocked.
Two Decades of Gold Stockpiling Now Being Drawn Down
Over the past twenty years, Russia had amassed more than 1,900 tons of gold, purchasing it from domestic miners. The most aggressive buildup occurred in two waves: over 500 tons were acquired between 2008 and 2012, and another 1,200 tons were added from 2014 to 2019. But by early 2026, collapsing energy revenues and sustained military and social spending forced a change in strategy.
“The reasons are obvious. External debt financing is unavailable, and domestic debt is already growing. Under these conditions, the Kremlin is doing the only thing left: dipping into the piggy bank it spent two decades filling.”
— SZRU
Starting in 2026, the Central Bank began selling gold directly to domestic buyers, including banks, state-owned enterprises, and select investment firms. In March alone, domestic gold trading in Russia reached 42.6 tons—3.5 times higher than the same month a year earlier. A large share of these transactions are swap deals, indicating that gold is no longer a passive reserve asset but has become an active financial tool used to manually manage the deficit.
At the current sales pace of roughly seven tons per month, Russia could sell between 80 and 90 tons of gold in 2026. This is not an immediate collapse, but it sends a powerful signal: a country that long showcased reserve accumulation as a sign of strength is now consuming them.
“The room for budget maneuvering is shrinking, and the very fact of moving to sales confirms what Moscow would prefer to keep quiet—the system’s financial resilience is gone.”
— SZRU
This development underscores the severity of Russia’s financial challenges. Depleting gold and foreign-exchange reserves could undermine the country’s economic stability, especially given its historical reliance on reserves to support the financial system. The shift to selling gold suggests a deepening crisis that threatens both economic growth and social welfare. With oil and gas revenues continuing to decline, all eyes will be on the government’s next moves to stabilize the situation.
As Russia grapples with declining oil revenues, the economic landscape continues to shift dramatically. The Kremlin's decision to liquidate gold reserves underscores the mounting fiscal pressures, which are further exacerbated by dwindling public approval for President Putin. For a deeper understanding of how these factors intertwine and impact the nation's economy, see how daily losses in oil revenue are influencing public sentiment.