Why is Russia selling its gold?

Russia has sold a substantial amount of its gold reserves in 2026 to raise funds and address a large budget deficit. As of July, the Russian Central Bank reported that its gold reserves had decreased to 73.4 million troy ounces or 2,282 metric tons, the lowest level since before the start of the Ukraine invasion in 2022.

The decline in gold reserves comes as gold prices reached record levels earlier in the year, averaging around $4,800 per ounce, before falling to a current level of about $4,000 per ounce. The Kremlin's decision to sell gold is believed to have generated over $5 billion in cash.

Economist Elina Ribakova from the Peterson Institute for International Economics explained that the gold sell-off indicates that Russia is running out of more liquid assets and faces pressure to finance its budget deficit. The Russian budget has been strained due to increased defense spending, which has more than quadrupled since 2021, totaling around 16 trillion rubles ($204 billion) in 2025.

Financial analyst Chris Weafer noted that while the gold sell-off is significant, it is not a sign of panic or the end of Russia's financial stability. He explained that the gold the Kremlin has sold has mostly been acquired through the National Welfare Fund, a designated asset for emergencies. Weafer added that Russia's domestic gold production allows the country to replenish its reserves relatively quickly.

The Kremlin aims to maintain a stable image and avoid negative speculation about its financial situation, as a strong economy is crucial for its geopolitical position. Russia holds the fifth-largest gold reserves globally, second only to Germany and the United States. However, the country's economic stability hinges on oil and gas revenues, with current difficulties mainly stemming from low oil prices.

Despite these challenges, analysts believe Russia can continue funding the war for the foreseeable future by reducing non-defense spending.