Thanks to the surge in gold prices since the onset of the Russia-Ukraine conflict, Russia has gained a windfall comparable in scale to its sovereign reserves frozen in Europe. According to calculations, the value of the Russian central bank's gold holdings has increased by more than $216 billion since February 2022. Meanwhile, despite losing foreign securities and currencies frozen due to sanctions, the central bank neither made substantial gold purchases nor significantly drew down its gold reserves during this period. In December, EU countries approved an extension to the freeze of approximately €210 billion (equivalent to $244 billion) in Russian sovereign assets held within the bloc. The increase in gold's value has restored a large portion of Russia's lost financial capacity. Although the securities and cash frozen in Europe cannot be sold or used as collateral, gold can still be monetized if necessary. As the world's second-largest gold producer, Russia mines over 300 tons of gold annually. However, since 2022, Russian gold has been excluded from Western markets and is no longer accepted by the London Bullion Market Association, effectively barring it from the world's largest over-the-counter gold trading center. This complicates any potential large-scale sales by the Russian central bank to Asian buyers, while also facing competition from newly mined gold by sanctioned Russian producers, which currently has no other sales outlets. Supported by a combination of strong central bank demand, persistent inflation concerns, heightened geopolitical risks, and investors seeking refuge from uncertainties stemming from trade wars, gold prices have risen sharply over the past four years. In 2025, gold gained approximately 65%, marking its strongest annual performance since 1979. This has significantly boosted the valuation of official gold holdings globally, even without additional purchases. According to data released by the Russian central bank last Friday, Russia's international reserves reached $755 billion by the end of last year, including $326.5 billion worth of gold. Since then, the gold price has risen over 8%, surpassing $4,700 per ounce.
The Russian Ministry of Finance expects gold prices to continue climbing in the long term to $5,000 per ounce and beyond. Russian Deputy Finance Minister Aleksey Moiseev stated in an interview at the end of December that the current rally reflects a loss of confidence in global reserve currencies, and attempts to seize Russian assets only increase demand. The Russian central bank did not begin drawing down its gold reserves until the end of last year, with holdings decreasing by 200,000 ounces to 74.8 million ounces. This decline reflects operations related to the Finance Ministry's sale of National Welfare Fund assets to cover the budget deficit. Data from the Russian central bank shows that from February 2022 to December 2025, the value of the country's gold reserves more than doubled, while reserves held in foreign assets and currencies fell by about 14%. Gold's share of total reserves reached 43%, compared to just 21% before the war. Since the start of the Russia-Ukraine conflict, Russia has stopped disclosing detailed information about its foreign exchange reserves. Data shows that as of January 1, the total amount of foreign currency and other non-gold assets was $399 billion. The Russian Ministry of Finance stated in 2022 that approximately $300 billion of its overseas sovereign assets had been frozen abroad. As negotiations for a peaceful resolution to the Russia-Ukraine conflict continue under U.S. leadership, the fate of these funds is expected to remain a topic of discussion. EU countries had discussed using frozen Russian assets to provide loans to Ukraine but ultimately failed to reach an agreement. In response, the Russian central bank has filed a lawsuit in Moscow demanding that Euroclear pay 18.2 trillion rubles (equivalent to $227 billion). Russian Central Bank Governor Elvira Nabiullina stated that the bank does not intend to abandon its claim and is considering legal action in international courts.
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