According to Kitco, Russia's budget deficit increased to 61.2 billion USD at the end of March. At the same time, the country's gold reserves decreased to 2, 304.76 tons as of April 1, 2026, of which March alone decreased by 6.22 tons, according to data released by the Central Bank of Russia on Monday.
In the context of the Russian economy facing much pressure in the 5th year of the conflict in Ukraine, domestic gold demand increased sharply. Data from the Moscow Stock Exchange shows that gold trading volume in the previous month increased by more than 350% compared to the same period in March 2025, reaching 42.6 tons. Of these, 28.6 tons were swap transactions and 14 tons were spot transactions.
In ruble terms, the increase was even stronger, up to 500% compared to the same period last year, reaching 534.4 billion rubles, equivalent to 7.1 billion USD.
Ms. Natalia Milchakova - chief analyst at Freedom Finance Global - told Reuters that selling gold to finance the budget deficit may continue in the context of government spending increasing sharply compared to the set budget target.
According to Ms. Milchakova, the Central Bank of Russia selling gold from its reserves is in line with the trend that many other central banks, especially in developing economies, are implementing.
Russia's gold reserves were mainly accumulated in the period 2002-2025, when the country bought more than 1,900 tons of gold. In the period 2008-2012 alone, Russia bought more than 500 tons and from 2014-2019 bought an additional 1,200 tons. According to analyst Nikolai Dudchenko of Finam, since 2020, Russia's net gold purchases have only reached 55.4 tons.
Mr. Dudchenko said that currently, some central banks are still continuing to sell gold to cover costs, including defense spending, responding to rising energy prices and supporting the domestic exchange rate.
Previously, on February 20, the Central Bank of Russia announced that it had sold 300,000 ounces of gold from its reserves in January, when the price of this precious metal set a record above 5,500 USD/ounce. After the sale, Russia's total holdings fell to 74.5 million ounces. This is the first time Russia's gold reserves have decreased since October last year.
The average gold price in January was around 4,700 USD/ounce, but at times peaked at 5,600 USD/ounce. With this price level, gold sales are likely to bring Russia from 1.41-1.68 billion USD.
Despite selling gold, Russia's gold reserve value still increased by 23% in January, to 402.7 billion USD, thanks to a sharp increase in world gold prices.
Not only selling gold from reserves, Russia also boosted exports of precious metals. In July last year, Bloomberg reported that Russia's exports of precious metals to China nearly doubled in value in the first half of 2025.
According to Bloomberg, China's imports of ore and precious metal concentrate from Russia, including gold and silver, increased by 80% compared to the same period last year, reaching 1 billion USD. This increase partly comes from the fact that gold prices increased by about 28% in 2025, due to geopolitical tensions, trade conflicts, along with purchases by central banks and exchange-traded funds.
Russia is currently the second largest gold producer in the world, after China, with an annual output of more than 300 tons. The Central Bank of Russia was once one of the world's largest gold buyers in the state monetary system, but purchases have decreased significantly since Moscow launched a comprehensive military campaign in Ukraine in 2022.
Meanwhile, the People's Bank of China is still in the group of central banks that buy the most gold in recent years.
Although Russia's gold exports to China increased in volume, most of the value increase also came from the sharp increase in gold prices in the past 12 months, when spot prices increased by nearly 43%.
In the domestic market, the demand for gold hoarding of Russians also increased to a record level last year, when the precious metal is considered a channel to preserve asset value. In 2024, Russian consumers bought 75.6 tons of gold, equivalent to about 25% of the country's annual gold production.
The price increase of other precious metals also contributes to improving revenue for major Russian mining enterprises. The report said that MMC Norilsk Nickel PJSC - one of the world's leading palladium and platinum producers - has strongly increased exports to China this year. In 2025, palladium prices increased by 38%, while platinum prices increased by 59%.
