Why is Russia Selling Gold Despite Holding Record-High Reserves?

Despite data showing that Russia’s gold reserves have reached more than $310 billion, the Russian Central Bank continues to sell significant quantities of gold.

This move has raised major questions regarding the possible motives behind giving up a key strategic asset—one that plays an essential role in maintaining financial stability for a country engaged in one of the most consequential wars in modern history, and one likely to expand and continue for a longer period.

The increase in the value of Russia’s gold reserves, denominated in US dollars, is the result of the dramatic rise in gold prices to current levels, surpassing $4,000 per ounce—a surge that occurred at the fastest pace in history.

Since the beginning of 2025, gold has risen from $2,623 per ounce on January 1st to $4,381, gaining $1,758 per ounce—an increase of more than 67% in a single year, from its opening level to its peak.

However, gold did not stabilize at its peak for more than two days before dropping more than $480 in only six days, falling below the $4,000 level.

Although it later recovered and stabilized above $4,000, with growing expectations of further gains due to continued easing by the US Federal Reserve and rising recession indicators in the US economy—factors that support gold against the dollar—the decision to sell part of the reserves at elevated prices may appear justified if the strategy aims to reaccumulate gold during market corrections.

So far, data does not indicate specific timelines for Russia’s gold sales, and obtaining such details would complete the picture and clarify the matter conclusively.

Geopolitical and Financial Pressure

If we combine this positive interpretation with the issue of Russia’s dollar-denominated assets under Western sanctions, and ongoing attempts by the West to confiscate them, we may be facing a liquidity squeeze in the midst of a fierce war that requires substantial funding—funds that are difficult to access under such circumstances except through gold sales.

Russia has adopted a local currency swap system, but most of the countries involved in these arrangements suffer from severe shortages of hard currency, increasing pressure on Russia’s foreign reserves.

Is It Really About Liquidity?

All this may not fully justify Russia’s gold sales, especially considering that Russia does not suffer from a trade deficit.

In fact, it holds a strong surplus, which contradicts the notion that Russia urgently needs foreign currency, forcing it to liquidate gold reserves.

Despite Russia standing on the opposite geopolitical side of the West in a decisive war, the Russian Central Bank is still part of the global monetary system, led by the US Federal Reserve, and remains subject to Basel regulations.

Communication continues between Russia and international institutions that govern central banking systems globally, formed under the dollar-based order established in 1945.

So the questions arise:

Is the Russian Central Bank acting independently, outside or in defiance of Russian political strategy?

Can the Russian Central Bank provide a clear explanation justifying its ongoing gold sales?