In a strategic move aimed at exploiting the unprecedented price surge in precious metals markets, the Russian Central Bank sold part of its gold reserves, taking advantage of prices reaching historic record levels to boost the country's financial liquidity.
Details of the sale process and the size of the reserves
Official data released by the Bank of Russia revealed a decrease of 300,000 ounces in the country's gold reserves, bringing the total to 74.5 million ounces. This is noteworthy as it represents the first actual decline in Russia's gold reserves since last October, suggesting a tactical shift in sovereign asset management.
According to market indicators included in the data, the average price of gold soared during January, reaching $4,700 per ounce. Economic estimates suggest that selling at these high prices could inject approximately $1.4 billion into the public treasury, providing immediate financial support.
Economic context: The National Welfare Fund and the budget deficit
This move comes as part of broader efforts by the Russian Finance Ministry and the Central Bank of Russia to manage the budget deficit. Last year, the financial authorities began what are known as "simulation operations," a mechanism involving the Finance Ministry selling assets from the National Welfare Fund to finance public spending.
Figures for the first two months of 2025 indicate that the Ministry of Finance spent approximately 419 billion rubles (equivalent to $5.5 billion) from the fund's assets. This financing was provided through the sale of gold and foreign currencies (such as the Chinese yuan) to offset the significant decline in oil and gas export revenues, which were affected by global market volatility and economic sanctions, leading to a widening federal budget deficit.
The value-volume paradox: asset values increase despite sales
Despite reducing the physical quantity of gold by 300,000 ounces, the total value of Russia's reserves saw a significant jump. The value of gold holdings rose by a substantial 23% in January alone, reaching a record high of $402.7 billion.
This increase in value, despite the decrease in quantity, reflects the strength of the precious metal's price performance in global markets and confirms the success of the central bank's strategy in hedging against economic risks by holding safe assets that increase in value during crises, thus giving the Russian economy greater flexibility in the face of external financial challenges.
