Amid volatile gold prices near record highs, Russia's central bank has opted to liquidate part of its gold reserves to address fiscal shortfalls.
Data released by the Russian central bank on Friday showed the country’s gold holdings fell by 300,000 ounces in January to 74.5 million ounces. This marks the first decline in the nation’s gold reserves since last October.
The timing of the sale was particularly strategic. Throughout January, global gold prices repeatedly set new records, averaging around $4,700 per ounce.
Based on prevailing market prices, the sale of 300,000 ounces of gold is estimated to have contributed approximately $1.4 billion (about 10 billion yuan) to the national budget.
This move was not coincidental but part of a deliberate strategy by the Russian finance ministry to ease budget pressures.
As early as November last year, reports indicated that the Russian central bank had begun selling physical gold from its reserves to help cover state budget needs.
More recent analysis notes that the central bank began tapping its gold reserves last year as part of a so-called "mirror operation" linked to the finance ministry’s divestment of assets from the National Wellbeing Fund.
In the first two months of 2025 alone, the finance ministry has already spent 419 billion rubles (about $5.5 billion) from the National Wellbeing Fund. With a widening budget deficit and declining oil and gas revenues, selling gold and foreign currency has become a necessary measure to balance the books.
Despite the physical sale, the market value of Russia’s gold reserves has actually increased.
Data show that, "even after the sale, the value of Russia’s gold reserves surged by 23% in January to $402.7 billion, driven by rising prices."
Since the onset of the Russia-Ukraine conflict in 2022, steadily climbing gold prices have provided Russia with a substantial windfall. This increase in value is comparable in scale to the amount of foreign currency assets frozen by European nations.
As market analysts point out, gold is effectively replacing lost liquid assets and serving as a crucial pillar of Russia’s fiscal resilience.