What made Putin sell 22,000 kg gold from Russia this year?

Russia’s central bank has sold 21.8 tonnes or 22,000 kilograms of gold so far in 2026 to help fund the country’s widening budget deficit, which had reached $61.2 billion by the end of March, a Kitco report said, citing Russian and Ukrainian news.

Gold reserves stood at 2,304.76 tonnes as of April 1, 2026, reflecting a decline of 6.22 tonnes in March alone, the central bank said on Monday.

At the same time, domestic demand for gold has surged as the economy faces continued strain in the fifth year of the war with Ukraine. Data from the Moscow Exchange showed gold trading volumes in March jumped more than 350% year-on-year to 42.6 tonnes, including 28.6 tonnes in swap deals and 14 tonnes in spot trades. In value terms, the increase was even sharper due to the weakening ruble, with volumes rising 500% from a year ago to 534.4 billion rubles, or $7.1 billion.

Russia had built up its gold reserves steadily between 2002 and 2025, acquiring more than 1,900 tonnes over the period. This included purchases of just over 500 tonnes between 2008 and 2012, and around 1,200 tonnes between 2014 and 2019. Since 2020, however, net purchases have slowed significantly to about 55.4 tonnes, according to Finam analyst Nikolai Dudchenko.

Experts say several central banks are currently selling gold to cover rising expenses, including defence spending, higher energy costs, and measures to support domestic currencies.

Earlier this year, on February 20, Russia’s central bank said it had sold 3,00,000 ounces of gold in January as prices climbed above $5,500 per ounce. This reduced total holdings to 74.5 million ounces and marked the first decline since October. With average prices around $4,700 per ounce in January and peaks near $5,600, the sale is estimated to have generated between $1.41 billion and $1.68 billion.

Despite these sales, the overall value of Russia’s gold reserves rose 23% in January to $402.7 billion, supported by record-high prices.Separately, Bloomberg reported that Russia’s precious metals exports to China nearly doubled in value during the first half of 2025. Chinese imports of Russian precious metal ores and concentrates, including gold and silver, rose 80% year-on-year to $1 billion, driven partly by higher bullion prices, which gained about 28% during the period amid geopolitical tensions and strong demand from central banks and exchange-traded funds.

Russia remains the world’s second-largest gold producer after China, with annual output exceeding 300 tonnes. While its central bank was once among the largest buyers of gold, purchases have declined since the full-scale invasion of Ukraine in 2022. In contrast, the People’s Bank of China continues to be one of the most active buyers.

Exports of Russian gold to China have increased in volume terms, though a significant portion of the rise reflects the sharp rally in prices, with spot gold up nearly 43% over the past year.
Domestic consumption has also been strong. Russian consumers bought a record 75.6 tonnes of gold in 2024, accounting for roughly 25% of the country’s annual production, as households turned to precious metals to protect their savings.

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