Russia is currently experiencing a surge in wealth due to rising gold prices, even as the world grapples with economic instability and criticizes Moscow's policies. This unexpected financial upswing provides Russia with a substantial $216 billion windfall, an amount comparable to the sovereign reserves frozen by European nations in response to the war in Ukraine.
The increase in Russia's gold reserves is primarily attributed to the soaring price of gold rather than an expansion of the volume of metal held. Since 2022, gold prices have reached record levels, driven by inflationary risks and escalating international conflicts, which have led investors to view gold as a reliable asset. In mid-March 2025, gold exceeded $3,000 per ounce, a significant increase from the $1,800 per ounce at the beginning of 2022. Spot gold has accelerated its upward movement, reaching approximately USD 4,865 per ounce.
This surge in gold value has enabled Russia to cover a substantial portion of its frozen assets in "unfriendly countries". In 2021, gold constituted approximately 21% (2,295 tons) of Russia's international reserves, valued at $132.84 billion. By 2025, the share of gold in Russia's reserves had increased to 35.4%, the highest in 25 years, with nearly 2,336 tons valued at $228.95 billion as of April 1.
Russia's focus on gold is a strategic move to diversify its financial reserves and reduce dependence on the U.S. dollar, a policy in development since 2013. As the second-largest gold producer globally, Russia is well-positioned to leverage its domestic resources. In 2023, the nation produced 321 metric tons of gold, further enhancing its ability to accumulate the precious metal.
While Russia benefits from increased gold revenue, some sources indicate the Russian economy is facing challenges. Sanctions have caused a record budget deficit, and inflation remains a concern. To address these issues, the Russian Central Bank has started selling physical gold from its reserves. This measure aims to inject currency into the market, support the ruble, and ease pressure on yuan holdings.
The rise in gold prices is also influenced by geopolitical factors, including tensions between the U.S. and Europe. These tensions, along with a weaker dollar, have increased demand for gold as a safe-haven asset. Moreover, expectations of U.S. interest rate cuts have further supported the gold rally.
Analysts predict that gold prices could continue to rise, potentially reaching $5,000 per ounce due to geopolitical uncertainties. This would further increase the value of Russia's gold reserves. The shift in global finance, with BRICS nations accumulating real assets and moving away from the U.S. dollar, suggests that gold will play an increasingly important role in international trade and monetary policy.
