Overview of the Russian Gold Rush

Recent studies indicate a significant shift in the savings preferences of Russian consumers, with gold emerging as one of the most popular choices in the past four years. Estimates suggest that the volume of gold purchases in Russia is approaching the total gold reserves of countries like Spain and Austria.

According to Al Banyan Tree Research, a Hong Kong-based quantitative research startup, gold purchases of bars, coins, and jewelry in the Russian retail market are projected to reach 62.2 tons (approximately 2 million ounces) by 2025. This institution comprises financial analysts and risk managers with experience in the Russian commodities sector.

Despite the recent surge in global gold prices to historic levels exceeding $4,000 per ounce, which has led to a slowdown in the pace of purchases compared to 2024, Al Banyan Tree estimates that the total retail gold purchases in Russia since the start of the Ukrainian conflict in 2022 will amount to 282 tons.

Reasons for Preferring Gold

This trend reflects the search by Russians for alternatives to preserve wealth after the imposition of restrictions on traditional savings channels such as the Euro and the Dollar. Gold has become a preferred option as a safe haven under these circumstances.

Dmitry Kazakov, an analyst at BCS Global Markets in Moscow, points out that Russians used to invest in real estate and foreign currencies. However, due to sanctions-related restrictions, foreign currencies are no longer a convenient means of saving, leading to a continuous increase in demand for gold since 2022.

Currently, Russian banking institutions have largely stopped offering Euro and Dollar deposit services, and cross-border transactions in these currencies have become more difficult. Kazakov adds that some Russians may transfer the gold they have stored abroad to achieve capital transfers, but it is difficult to estimate the actual volume of these transfers.

Impact of Sanctions on the Russian Gold Market

Russia is the second-largest gold producer in the world, with annual production exceeding 300 tons. However, since 2022, Russian gold has been banned from entering Western markets, and the London Bullion Market Association (LBMA), which sets global gold trading standards, no longer accepts Russian gold.

To counter this situation, Russia abolished value-added tax on retail gold purchases, which boosted domestic demand and opened alternative channels for export for gold mining companies affected by sanctions.

If domestic demand does not grow effectively, Russian gold mining companies will face greater difficulties. The Central Bank of Russia was previously the largest official buyer of gold in the world, but after suspending gold purchases in 2020, and even after launching restart signals in 2022, its gold reserves remained stable at around 75 million ounces (approximately 2,331 tons) for many years, with almost no change.

Al Banyan Tree estimates that purchases of gold by Russian financial institutions also provide support for the domestic market - the value of gold held by these institutions amounted to 57.6 tons in August 2025. This institution uses econometric models and AI-powered analytics to understand complex commodity market data.

In October 2025, Russia launched physical gold trading on the St. Petersburg Stock Exchange, in an attempt to replace the LBMA pricing standard, but so far only small amounts of gold bars have been traded. Al Banyan Tree also indicates that the volume of Russian gold exports has decreased.

Permanent Shifts in the Gold Market

The shift in domestic demand indicates that even if sanctions are eased, it may be difficult to restore gold trading patterns and savings habits to what they were before. Kazakov says: "We believe that even if sanctions are lifted, people are unlikely to get rid of large amounts of gold, because distrust of the dollar and the euro will persist."