Why is Russia's Central Bank selling its gold?

Russia has significantly reduced its gold reserves in 2026, selling approximately 43.5 metric tons, bringing its holdings to the lowest point since before the full-scale invasion of Ukraine in February 2022. As of early July, Russia's gold reserves stood at 73.4 million troy ounces, or 2,282 metric tons.

These sales are primarily driven by a substantial budget deficit, exacerbated by soaring defense expenditures for the war in Ukraine. The Financial Times reported earlier this year that Russia's Finance Ministry had warned of excess war spending reaching at least $28 billion in 2026, with further overspending anticipated in subsequent years. Defense spending has more than quadrupled since 2021.

“

The fact that they are selling gold means that they are running out of other more liquid assets. Therefore, there is pressure on the deficit and also on the sources to finance such a deficit.

The gold sales are estimated to have generated over $5 billion. Elina Ribakova, an economist at the Peterson Institute for International Economics, noted that Russia's decision to sell gold indicates pressure on its budget and a need for liquidity, suggesting they are running out of more readily available assets.

However, analysts like Chris Weafer of Macro-Advisory view these sales not as a sign of panic but as a strategic management of assets. He explained that much of the gold was sold by the Finance Ministry through Russia's National Wealth Fund (NWF), which has been acquiring gold as an alternative to U.S. Treasury bonds and German bunds due to sanctions. This strategic diversification has made gold a key liquid asset within the fund, intended for precisely such situations.

“

It is an extraordinary situation, but it constitutes a relatively normal trend. It does not in any way mean that Russia is bankrupt, is running out of money, has nothing else and is literally selling the silverware.