Hong Kong, Russia’s gold hub where sanctions fail

Sanctioned Russian gold is pouring into Hong Kong. Nearly 100 tonnes of the metal reached the city by August, three times more than in 2025, as Russia’s gold exports shift toward Asian markets.

The change reflects a broader reshaping of the global gold trade. London, New York and Dubai traditionally dominated the market, but Asian financial centres are now trying to expand their influence. Debajit Saha, an analyst at the London Stock Exchange Group, said Russian producers increasingly redirected exports east after London closed its market to Russian gold following the outbreak of the war in Ukraine.

Hong Kong companies have bought about $35 billion worth of Russian gold since the beginning of 2022, according to trade statistics cited in the report. Much of the metal is intended for customers in mainland China. Chinese buyers often purchase gold and store it in Hong Kong because imports there are not subject to China’s quotas, analyst Saha said. Hong Kong’s share of China’s total gold imports has consequently risen sharply over the past two years.

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Since London closed its doors to Russian gold after the outbreak of the war in Ukraine, Russian producers have increasingly redirected exports to eastern markets.

The city is seeking to make the most of that position. In July, it began testing a new gold settlement system. Vita Spivak of geopolitical consultancy Gatehouse linked Hong Kong’s growing role in moving Russian gold into China to closer economic ties between the two countries. Logistical disruptions in the Middle East, including the blockade of the Strait of Hormuz and fighting in the Persian Gulf, have also increased Hong Kong’s importance as a settlement centre, the report said.

The flow has not stopped despite US sanctions imposed in 2024 on several Hong Kong entities involved in a Russia-linked money-laundering network. Tan Albayrak, a sanctions expert at Reed Smith, warned that Western banks risk becoming unintentionally involved in transactions connected to sanctioned producers and could face secondary sanctions. Russia is also selling gold from its reserves to cover a growing budget gap and finance the war. In July, reports said the central bank had sold reserve gold for six consecutive months as the deficit reached almost 6 trillion roubles in the first half of the year.

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Western banks expose themselves there to the risk of unintended involvement.