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Russia’s Gold Reserves Shrink for Fourth Consecutive Month Amid Rising Budget Demands
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The Central Bank of Russia reported that the nation's gold reserves shrank for the fourth consecutive month in April 2026. This volume dropped by 200,000 ounces during the month and by 900,000 ounces since the start of the year, bringing the total to 73.9 million ounces of gold bullion as of May 1.
This overall reduction of 27.9 tons of gold from January to April marks the sharpest four-month decline in the country's gold reserves since 2002. As a result, total holdings have dropped to their lowest levels since March 2022, according to The Moscow Times on May 20.
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The rapid reduction comes as Moscow faces a federal budget deficit that reached 4.6 trillion rubles ($51.1B) by the end of March, driven by high military spending and weak oil and gas revenues at the beginning of the year.
The historical data from the World Gold Council shows that the last drawdown of this scale occurred in May 2002, when the central bank's gold holdings fell by 41.5 tons in a single month.
Over the subsequent two decades, the central bank focused almost exclusively on accumulating gold, often adding hundreds of tons annually. During this time, it rarely allowed monthly reductions to exceed 100,000 ounces, or 3.1 tons, which were used primarily for minting coins.
The only major exception prior to this year was in July 2005, when reserves decreased by 7.7 tons, a figure that the 2026 sell-off has now surpassed by 3.5 times.
The central bank is liquidating these gold holdings as part of an operation to mirror the transactions of the National Wealth Fund, which forms a component of the country's total foreign exchange reserves. Natalia Milchakova, an analyst at Freedom Finance Global, points out two major reasons for these market interventions.
Milchakova states, “First of all, this is to cover the budget deficit, which reached 4.6 trillion rubles ($51.1B) by the end of March. Without partial compensation from the Central Bank amid modest oil and gas revenues at the beginning of the year, the figure could have exceeded 5 trillion rubles ($55.5B).”
Milchakova also highlights the necessity of addressing currency shortages on the domestic market. Milchakova notes, “In addition, the sale of gold could be aimed at forming a reserve of foreign currency—its deficit arose due to weak export income at the beginning of the year. The precious metal was exchanged for yuan.”
Since 2022, the Russian government has routinely utilized foreign currency and gold from the National Wealth Fund to stabilize the state budget, where military expenditures have reached their highest levels since the Soviet era following Russia’s full-scale invasion of Ukraine.
Until recently, these gold transactions remained purely internal accounting maneuvers, with the government selling the metal directly to the central bank, ensuring the physical bullion stayed within the country's broader international reserves. Consequently, Russia maintained a total stockpile of over 2,000 tons, the fifth largest in the world.
This mechanism shifted at the beginning of 2026, when the central bank began executing real operations to sell physical gold on the market, matching the approach already used for Chinese yuan holdings within the wealth fund.
Russian economists Alexandra Prokopenko and Alexander Kolyandr suggest that this shift is intended to prevent the complete depletion of the central bank's remaining yuan assets. The yuan represents the last accessible foreign reserve currency available for market interventions and ruble exchange rate management.
The exact amount of yuan remaining in the state reserves is currently unverified, as the central bank classified the detailed structure of its holdings after international sanctions froze approximately $300 billion of its foreign assets.
The Kremlin’s fiscal stability has faced unprecedented pressure as the 2026 budget cycle projects a deficit nearly double that of the previous year. In early March, Russian war spending has officially surpassed all social welfare allocations, forcing the government to tap into the National Welfare Fund at a record pace.
Currently, as Russian leader Vladimir Putin seeks to maintain the offensive in Ukraine, the depletion of liquid assets in the “war chest” has left the Russian Central Bank with few options beyond the liquidation of its gold holdings and the remaining yuan reserves.
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