Putin Is Selling Off Gold

• Dmitry Kornienko
• 10.09.2026, 11:57

Ukraine may block this channel as well.

The state of Russia’s economy and banking sector is deteriorating, liquid assets are largely depleted, and therefore the Kremlin is resorting to the only method still widely available to cover the deficit—the sale of gold.

The World Gold Council noted that Russia has set an all-time record for the volume of gold sales.

It’s Not That Simple

Since the beginning of the year, the Kremlin has sold 49.7 metric tons of gold—a volume second only to the 1998 default, when the government bond market collapsed and the Kremlin was forced to sell 118 metric tons. The reason is stated openly—the need to cover the budget deficit.

However, despite the record sales, it is worth noting that the Kremlin holds 2,240 metric tons of gold; therefore, the key problem for the Kremlin lies not in the presence or absence of gold, but in the limited mechanisms for converting it and the constraints of the market.

Budget needs must be met here and now, and this requires highly liquid assets. In the Kremlin’s case, however, gold faces two constraints: market demand (that is, it’s impossible to sell more than buyers are willing to purchase), as well as partial sanctions from the EU, the U.S., and the G7, which, for example, have cut the Kremlin off from the largest London exchange.

This has created two dependencies for the Kremlin: on the buyer and on conversion channels.

As is no secret, China is the main buyer of Moscow’s gold, but in order to sell the gold, Russia must legally list it on an exchange. And for the Kremlin, there are two such major exchanges: the one in Dubai (UAE) and the one in Hong Kong (Hong Kong). That is where the main flows of Kremlin gold are directed, and from there they end up in China.

Not only a shadow fleet, but also “shadow” exchanges

Every such transaction makes life easier for the Kremlin regime, even though the market and buyers are not ready to purchase the volume and at the price the Kremlin wants.

Both the UAE and Hong Kong, as commercial hubs, are highly sensitive to sanctions-related fluctuations, since exchanges and stock markets are currently showing signs of a pre-crisis state, and any shocks—even temporary ones—affect the behavior of market participants. To put it very simply—we need a public track record, and preferably real sanctions from the EU to deliver a commercial and political blow to the “reliability” of these two exchanges precisely because they handle the Kremlin’s gold.

And creating such a track is, first and foremost, Ukraine’s responsibility, logically speaking: sanctions in 2022 were imposed specifically on Kremlin gold, which is why secondary sanctions (for facilitating its trade) have not yet been imposed.

This issue is being overlooked. This includes Ukrainian diplomatic and public discourse: whether out of a mysterious expectation that the UAE will cool its relations with the Kremlin—which is unlikely, given that this country contributes more than any other in the region to circumventing sanctions, registering a shadow fleet, selling gold, and building a crypto payment network in collaboration with the Kremlin. It’s the same story with Hong Kong (we keep quiet so as not to offend China).

The latest sanctions packages are on a timer

In the EU, especially in Ireland, which currently holds the presidency, is actively stating that the approach to sanctions will shift from blanket packages to a more targeted/sector-specific one in the future due to the complexity of reaching consensus, including potential changes in Europe’s political landscape in 2027.

Therefore, it is likely that it will be politically feasible to adopt package sanctions only two more times: in the fall and winter of 2026 and in the spring of 2027. It is precisely these package sanctions that are important because of how they are perceived. They have a stronger impact on the behavior of “businesspeople” from third countries. And it is very important that these two packages address the issue of structures facilitating the sale of “Kremlin gold.” After all, it is not the mere existence of gold in the Kremlin’s possession—but rather the speed and exchange logistics—that constitute the bottlenecks.

And while in past years there were more urgent sanctions—given that the Kremlin relied on other assets, and the corresponding media, political, diplomatic pressure was focused on higher priorities, it is now important to promptly identify the need to shift priorities (which is exactly what we are doing).

Strikes against the logistics of gold conversion must now become a priority, because this is becoming an increasingly important factor for the Kremlin. And what is important to the Kremlin is important to us as well. With one caveat: the politically opportune window for applying pressure is not infinite.

The logic is simple: if we hinder the sale of gold, we’ll make it harder for the Kremlin to draw up its budget—and that means more challenges and a higher likelihood of critical management errors.

Dmitry Kornienko, “Channel 24”