$216 Billion Windfall: How Russia Benefited From A Gold Boom Meant To Hurt It Despite Sanctions

Last Updated:January 21, 2026, 18:39 IST

By the end of last year, Russia’s total international reserves stood at roughly $755 billion, with $326.5 billion- or 43%- held in gold.

Russian President Vladimir Putin

Russia emerged as an unlikely beneficiary of the global gold boom triggered in part by the war in Ukraine. As bullion prices surged to multi-decade highs, the value of Russia’s gold reserves swelled dramatically delivering an estimated $216 billion windfall since February 2022, when Moscow launched its full-scale invasion of Ukraine. The gains from gold almost mirror the value of Russian sovereign assets frozen by Western sanctions, reshaping assumptions about how effective financial pressure has been in constraining the Kremlin.

How Big Are Russia’s Gold Gains?

According to calculations by Bloomberg, the value of gold held by the Bank of Russia has risen by more than $216 billion over the past three years. Over the same period, Russia’s holdings of foreign currencies and securities have declined by about 14%, reflecting the impact of sanctions and restricted access to global financial markets. By the end of last year, Russia’s total international reserves stood at roughly $755 billion, with $326.5 billion- or 43%- held in gold, up sharply from around 21% before the war.

Did Sanctions Backfire On Russia?

Western governments froze an estimated $300 billion of Russian central bank assets in response to the invasion, with the European Union accounting for roughly $244 billion of that total. The strategy was meant to deprive Moscow of financial firepower. But gold- which sits largely outside Western banking systems- proved harder to neutralise.

Unlike cash or securities held in foreign institutions, gold has intrinsic value. While sanctions and market restrictions make it difficult for Russia to freely sell or trade its bullion, the rising price alone has restored a significant portion of its balance-sheet strength.

Why Have Gold Prices Soared So Sharply?

Gold has been in a sustained bull market for four years, driven by persistent inflation, geopolitical instability and aggressive buying by central banks seeking safe-haven assets. Prices have climbed beyond $4,700 an ounce, with bullion recording its strongest annual gain since 1979 in 2025- rising roughly 65% over the year. Central banks across Asia, the Middle East and emerging markets have increased gold holdings to diversify away from the US dollar and mitigate sanctions risk, reinforcing the rally.

What Role Does Russia Play In Gold Market?

Russia is one of the world’s largest gold producers, mining more than 300 tonnes annually. Since 2022, its bullion has been barred from Western markets and delisted by the London Bullion Market Association. Even so, production continues and rising global prices have lifted the value of both newly mined gold and reserves already held by the state. In Moscow, officials have pointed to the rally as proof that years of stockpiling hard assets reduced Russia’s vulnerability to Western pressure.

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