Global Central Banks Are Buying Gold. Russia Is Selling More Than Anyone to Cover Its Budget Deficit

Russia’s central bank sold more gold than any other central bank in the world for a second consecutive quarter as Moscow drew down reserves to help cover a record wartime budget deficit, The Moscow Times reported on November 4.

According to World Gold Council data cited by the outlet, the Bank of Russia sold 18.66 metric tons of gold in the third quarter of 2026. Global central banks collectively bought 321.2 tons over the same period, 42% more than a year earlier.

Russia’s fiscal strain is also spreading to regional budgets. In October, Ukraine’s Foreign Intelligence Service reported that 65 Russian regions were preparing spending cuts for 2027–2029, with combined regional deficits projected at about $10.5 billion.

Russia’s central bank has now been selling gold for 10 consecutive months as part of operations linked to the Finance Ministry’s use of the National Wealth Fund to cover the federal budget deficit.

The Moscow Times reported that Russia’s budget deficit reached 7.3 trillion rubles ($89.7 billion) in 2026 and has exceeded 22 trillion rubles ($270.8 billion) since the start of the full-scale war against Ukraine.

In the previous quarter, Russia’s gold reserves fell by another 21.77 tons, according to World Gold Council data. Between December and September, the central bank’s own statistics showed that Russia’s reserves declined by 2 million troy ounces, or about 62 tons.

The current selloff is Russia’s largest drawdown of gold reserves since the 1998 financial crisis. At that time, the central bank sold 118 tons over three months, although some of the gold was later repurchased.

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Russia had spent more than two decades steadily building its gold reserves. By early 2022, the country held around 2,300 tons, making its stockpile the fifth largest in the world.

Part of the gold leaving Russia is being redirected to China. The Moscow Times reported that around 100 tons of Russian-origin gold entered Hong Kong between January and July 2026, roughly three times the volume recorded during the same period a year earlier.

The shift followed the closure of the London market to Russian gold after the full-scale invasion, pushing Russian suppliers toward Asian buyers.

Russia’s wider war economy is showing signs of slowing as a result. In November, Russia’s Ministry of Economic Development projected a 0.2% contraction in industrial output for 2026, the first decline in five years, while defense manufacturers were reported to be cutting production as state orders weakened.

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