Russia Conducted Its Largest Gold Sale Since 1998
- 20.10.2026, 19:46
Putin is trying to boost the military budget.
The Bank of Russia has continued to sell gold from its reserves for the tenth consecutive month as part of operations to cover the budget deficit, which this year will be twice as large as originally planned—7.3 trillion Russian rubles, according to The Moscow Times.
As the Central Bank reported on Tuesday, Russia’s gold reserves fell by another 0.2 million troy ounces (about 6.2 metric tons) in September, bringing the total to 72.8 million ounces—the lowest level since late 2019.
Since December, when the Central Bank began its largest sell-off in several decades, the amount of gold in its reserves has decreased by 2 million troy ounces—about 62 metric tons.
According to International Monetary Fund statistics, there has been only one instance in modern history when Russia sold off its gold reserves more rapidly: in 1998, amid a default, a currency crisis, and the collapse of the government bond (GKO) pyramid scheme, the Central Bank sold 3.8 million troy ounces of gold (118 metric tons) over the course of three months. However, by the end of the year, some of the gold bars had been repurchased, and over the course of the year, the Central Bank’s gold reserves decreased by 1.6 million ounces (about 50 metric tons)—that is, less than in the current year.
Subsequently, the Kremlin only added to its gold reserves, increasing them more than fivefold since the late 1990s. By early 2022, it stood at 74 million troy ounces, or 2,300 metric tons, and was the fifth largest in the world.
The sell-off that began late last year, which made the Russian Central Bank the largest seller of gold among all central banks worldwide, is linked to “mirroring” transactions previously conducted by the Ministry of Finance using assets from the National Wealth Fund, Reuters notes: The Central Bank is selling the NWF’s gold on the market—gold that the Ministry of Finance had previously sold to cover the budget deficit.
“The Ministry of Finance is using accumulated reserves (including those in gold) to cover the budget deficit amid a shortfall in revenues. Since oil and gas revenues declined in 2026, this has led to increased sales of National Wealth Fund (NWF) assets, including gold,” explains Finam analyst Alexander Potavin.
In addition, the Central Bank may use gold sales to cover a shortage of foreign exchange liquidity, and high global gold prices likely also “contributed to the decision to step up sales of the precious metal,” Potavin notes.
A portion of the Russian gold sold is flowing to China, which this year has increased its purchases of the precious metal from Russia to historic highs. According to Chinese customs data, approximately 100 metric tons of gold of Russian origin arrived in Hong Kong from January through July—three times more than during the same period last year.
After the London market—the world’s largest—closed its doors to gold from Russia, Russian suppliers are redirecting exports eastward, notes Debajit Saha, an analyst at LSEG. Gold flows from Russia surged into China in the very first year of the war, and since then, $35 billion worth of the precious metal has been exported via Hong Kong, according to calculations by the Financial Times.