Russia Has $140 Billion Stockpile Of Gold But No One's Buying It
Topics: Russia, Ukraine, Volodymyr Zelensky, Vladimir Putin
Dominic Smithers
Featured Image Credit: Alamy
Topics: Russia, Ukraine, Volodymyr Zelensky, Vladimir Putin
Russia is struggling to sell off its vast gold reserves.
Over the past 20 years, the country has built up a stockpile of gold worth around $140 billion to act as a safety net during times of economic hardship.
However, following the country's invasion of Ukraine, Russia's economy has been hit massively by sanctions imposed by western nations.
The US government announced last week that it was banning the trade of Russian gold.
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European allies also introduced similar sanctions, with London's gold marketplace banning all bars from Russian refineries.
The US Treasury Department said: "US persons are prohibited from engaging in any transaction – including gold-related transactions – involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation or the Ministry of Finance of the Russian Federation."
In a statement cited by Business Insider, Senator Angus King, an independent from Maine, said: "Russia's massive gold supply is one of the few remaining assets that Putin can use to keep his country's economy from falling even further.
"By sanctioning these reserves, we will further isolate Russia from the world's economy and increase the difficulty of Putin's increasingly costly military campaign."
The sanctions have now narrowed the market, making it incredibly difficult for Russia to offload any of its gold reserves to raise much needed funds.
Speaking to Bloomberg, Fergal O'Connor, a lecturer at Cork University Business School in Ireland, said: "This is why they bought their gold. It was for a situation just like this. But if no one will trade it with you, it doesn't matter."
Russia has spent years building its gold supply, reportedly expanding it as much as sixfold since the mid-2000s; the country is now home to the world's fifth-biggest stash, valued at around $140 billion. In the wake of the ruble plummeting in global markets, many expect Russia to try and sell some of the gold to make up for it.
CPM Group Managing Partner Jeff Christian suggests Moscow could look to the East and banks in countries like India and China to sell. "They could pick it up at a discount to the market," he told Bloomberg.
However, with the current sanctions imposed by the UK, US and European countries on Russia, India and China – and any other country – may be reluctant to strike a deal.
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