Rising gold prices are supporting Russia’s war machine

The most recent appreciation of gold has raised the value of Russia’s reserves, some 2,326 tons, to more than $302 billion — a cushion that has helped sustain the Russian economy amid record spending on the war against Ukraine.

Gold prices remain at historic highs. This Thursday, the price of the precious metal rose another 3.13%, reaching a new historical maximum of $4,333 per ounce in international markets. On this date, the AORP reached the €120.37 per gram.

After having increased 27% in 2024, gold has already appreciated by more than 50% since the beginning of 2025, and experts say that this upward trend is expected to continue, with some predicting that the price could reach 5,000 dollars per ounce by the end of 2026.

According to the independent Russian portal, there is no one more pleased with this gallop than Kremlin officials — who “are laughing on the way to the Central Bank” to deposit their gains.

Gold represents about 1/3 of Russia’s total reservesand the most recent appreciation has increased the value of these reserves, around 2,326 tonsfor more than 302 billion dollars.

The constant rise in the price of gold in recent years is directly related to investor concerns regarding the future stability of the world economy.

As crises that have devastated the world in recent yearsranging from the coronavirus pandemic to Russia’s war against Ukraine, including conflicts in the Middle East, drove gold to new highs, notes Meduza.

More recently, the US President Donald Trump’s trade warhas fueled new rises, with fearful investors to return to looking for gold as a safe haven asset.

After Trump had threatened China, on October 10with an additional 100 percent tariff on a wide range of imports, global stock markets plummeted, while the price of gold soared.

Nonetheless, the Kremlin has been betting on gold for almost two decades. According to data from , Russia became a net buyer of gold in 2006. The Kremlin accelerated its acquisitions from 2014, precisely when the country was the target of international sanctions after the annexation of Crimea.

Since then, Russia accumulated one of the largest gold reserves in the world — a cushion that has helped sustain the economy Russian in full swing record spending on war against Ukraine, says Meduza.

Strategy is now bearing fruit

Even when the Central Bank of Russia no longer adds physical gold to the vaults, the appreciation of prices has increased the value of your reserves.

Furthermore, unlike the nearly $350 billion in Russian sovereign assets that remain frozen in foreign banks, these gold reserves are on Russian territory — beyond the reach of international sanctions.

“Russia is lucky because sanctions forced it to increase the proportion of gold in its reserves and moving away from investments in dollars. This strategy is now bearing fruit,” he said. Natalia Orlovachief economist at Alfa Bank, told the Russian financial information portal .

At the same time, the Russian Ministry of Finance’s sales of gold from the National Wealth Fund, at record prices, are helping to partially cover the growing federal budget deficitl, which is expected to reach 5.7 billion rubles (about 71 billion dollars), equivalent to 2.6 percent of the country’s GDP.

Second Krishan Gopaulanalyst at the World Gold Council, the Russian Central Bank communicated a reduction of gold reserves in August“probably related to your coin minting”.

Moscow will have sold just over three tons of gold, worth around 441 million dollars. “Putin’s war in Ukraine helped drive up the price of gold, in a Machiavellian virtuous cycle that benefited Russia,” he says Chris Pricemarkets editor of .

Despite international sanctions on Russian gold, high prices continue to benefit the country’s mining sectorwhich remains mainly export-oriented.

According to the World Gold Council, Russia was the second largest producer world gold market in 2024, with a production of 330 tons.

While some analysts warn that record gold prices are unsustainable, a possible descent should have little impact on Russia. “Barring a catastrophic and unprecedented fall, Putin will continue to have hundreds of billions of dollars in gold reserves,” notes Chris Price.