Russia boosts gold stock to cushion impact of US, EU sanctions
02/08/2023 // Roy Green // Views

Russia went on a gold-buying spree last year out of necessity. It wants to cushion the full impact of the trade and economic sanctions imposed by the United States and the European Union (EU) nations following its invasion of Ukraine on February 24, 2022.

According to Finance Ministry data obtained by Reuters on Feb. 3, Russia bought an all-time record number of gold bars in 2022, and this figure does not even include the December purchases.

Russia has reportedly bought over 50 tons of gold bars, which is already 10 times more than what the country bought in 2021. (Related: Russia links its ruble to gold in bid to circumvent U.S.-led sanctions and upend the dollar as the global reserve currency.)

Russia's fixation on gold started in 2014, when it was sanctioned for its annexation of Crimea, an autonomous republic in Southern Ukraine. At that time, its gold holding sat at just 1,000 tons.

Moscow encouraged its people to stock up on bullion as a safe asset by imposing tax cuts on precious metals, even scrapping its 20 percent VAT on physical gold trades for individuals last March. Furthermore, it exempted people from paying income tax on profits gained from selling gold bars.

Clearly, the Kremlin wants to prevent people from using the U.S. dollar in transactions and it succeeded as the demand for gold escalated.

America remains the runaway gold reserve leader

The United States remains the runaway gold reserve leader with 8,133.5 tons or nearly the total of the next three – Germany with 3,359.1 tons, Italy with 2,451.8 tons and France with 2,436.5 tons. Now, Russia’s gold stockpile of 2,301.6 tons is the fifth-biggest in the world, overtaking its ally China in 2018.


Russia and China, along with fellow BRICS members Brazil, India and South Africa, aim to topple the dollar as the world's reserve currency.

Economic experts opined that Russia's increased gold reserve is part of its plan to ease out American investments. They noted that the Russians mainly sold U.S. Treasury bonds to buy the bullion.

Russia's moves were in retaliation to the U.S. and European governments' freezing of the country's U.S. dollar and Euro reserves, which were worth around $300 billion. Furthermore, Russian banks were booted out of a major system used to send international wire transfers while many Western companies left the country.

A bipartisan group of U.S. senators, on the other hand, accused Russia of purchasing gold and then selling it for hard currency. They have "launched legislation to stop anyone transacting with or transporting gold from Russia's central bank holdings or selling gold physically electronically in Russia."

Sen. Angus King of Maine – along with Republicans John Cornyn of Texas and Bill Hagerty of Tennessee and New Hampshire Democrat Maggie Hassan – launched the "legislation to stop anyone transacting with or transporting gold from Russia’s central bank holdings or selling gold physically or electronically in Russia."

The Bank of Russia spent six years buying gold and stopped only in March 2020 as prices spiked at the onset of the Wuhan coronavirus (COVID-19) pandemic. It has largely kept its stockpile steady since.

The state-controlled VTB Bank said it sold 33.8 tons of gold bars to customers in 2022, with clients holding 50 billion rubles ($711 million) worth of the yellow metal.

"Gold was a good protective financial solution last year," said Yevgeny Beresnev of VTB's investment products department. "Customers shifted funds into this instrument in order to diversify their assets and make a profit when long-term planning."

While gold turned out to be a good investment, it still failed to lift VTB's overall performance last year as Russia's No. 2 banking and financial services company incurred losses, which it attributed to the U.S. and EU sanctions.

This admission was far from the Kremlin narrative that it's business as usual in Russia.

Watch the video below to know more about a bipartisan group of  U.S. senators filing a bill to freeze Russian gold.

This video is from the Zoon Politikon channel on

More related stories:

US move against Russian gold reserves may signal impending monetary reset.

Ukraine has sold $12 billion of its gold reserves since start of Russian invasion.

Russian energy chief says country will begin taking payment for oil in gold, bitcoin to bypass Western sanctions.

Sources include:

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