Why is Russia now selling physical gold from its national reserves for the first time

Russia has begun selling physical gold from its national reserves, marking the first verified shift from long-standing internal accounting transfers to genuine market transactions. As reported by The WP Times, citing Reuters, the Central Bank confirmed that these gold operations are now carried out directly on the domestic market as part of wider budget-support measures implemented through the National Welfare Fund, which has been increasingly used to cover fiscal shortfalls as its liquid assets continue to decline.

For years, Russia’s gold transactions were largely non-market movements, where gold was transferred between the Ministry of Finance and the Central Bank without leaving state vaults. According to the new policy, the gold is now being sold physically, similar to how the fund has been selling Chinese yuan to offset budget deficits.

Before the full-scale war, Russia’s sovereign wealth fund held around 405 tonnes of gold. Since 2022, approximately 57% of that stock—about 232 tonnes—has been sold, leaving the fund with an estimated 173 tonnes as of early November 2025. Over the same period, the fund’s liquid assets, including gold and yuan, have dropped sharply from 113.5 billion USD to around 51.6 billion USD.

The Central Bank did not disclose when the physical gold sales began, nor the volume or frequency of the ongoing transactions. Officials noted that the domestic gold market has become significantly more liquid, allowing such operations to be carried out without disrupting market stability.

Gold remains one of the most strategically important components of Russia’s reserve structure, accounting for more than 40% of its total international reserves. Unlike foreign currency assets, part of which remain frozen abroad, physical gold held inside Russia cannot be directly restricted by international sanctions. The move underscores ongoing pressure on state finances and Moscow’s reliance on assets immune to external financial controls.

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