Russian Dictator Sells Gold Reserves for First Time in Quarter Century as War Chest Collapses

(MOSCOW, RUSSIA) – The Russian dictator Vladimir Putin has begun selling Russia’s physical gold reserves on the open market for the first time in nearly 25 years, a move analysts describe as evidence that the Kremlin is exhausting its financial buffers to sustain an unwinnable war against Ukraine.

Confirmed by The Moscow Times on 24 March and corroborated by the World Gold Council, Euromaidan Press, and Ukraine’s Foreign Intelligence Service, the Central Bank of Russia liquidated 300,000 troy ounces of physical gold in January. A further 200,000 troy ounces were sold in February. This represents roughly 14 metric tons of bullion in two months, the largest drawdown since the second quarter of 2002.

Russia’s total gold reserves have fallen to 74.3 million ounces, the lowest level recorded since March 2022, the month the full scale invasion of Ukraine began.

The broader financial picture is considerably worse. According to Russia’s own Ministry of Finance data reviewed by The Moscow Times, gold holdings in the National Wealth Fund, the sovereign reserve intended for emergencies, have been reduced by 71 percent since May 2022. The fund has contracted from 554.9 tons to approximately 160 tons. Three quarters of the war chest has been depleted.

The Russian budget is haemorrhaging. The cumulative federal deficit between 2022 and 2025 has exceeded 15 trillion rubles, equivalent to approximately 183 billion US dollars at current exchange rates. In the first two months of 2026 alone, Moscow added another 3.5 trillion rubles to that deficit. This single two month gap nearly equals the amount the Kremlin had budgeted for deficit spending across the entire year.

United 24 media reports that the January gold sale generated approximately 120 billion rubles, roughly 1.4 billion US dollars. According to Moscow Times analysts, this sum covers “a mere three percent of the projected annual deficit” required to fund a war that now consumes more than Russia spends on all social welfare programmes combined.

Alexander Prokopenko, a former Russian central bank adviser now at the Carnegie Russia Eurasia Centre, has provided some of the sharpest analysis on the situation. Writing for The Economist, she compared Russia’s economy to a mountaineer in what climbers term “the death zone,” an altitude where the body deteriorates faster than it can repair itself.

Defence factories generate the appearance of growth, she argued, but missiles and shells are not assets. They explode and they disappear. The economy, in her phrase, is “metabolising its own muscle tissue.”

Anders Aslund, the veteran economist who has written extensively on Russia’s crony capitalism, described the situation as “the regime’s moment of truth.” He cited stagflation, labour shortages, capital flight, and a National Wealth Fund that has shrivelled from 174 billion US dollars before the war to approximately 31 billion US dollars currently.

According to Ukraine’s Foreign Intelligence Service, the SZRU, Moscow has budgeted for liquidating nearly 19 billion US dollars in gold and precious metals in the first six months of 2026 alone.

On 25 March, the Russian dictator signed a decree, reported by TASS and analysed by Kitco News, stipulating that from 1 May no individual may export refined gold bars heavier than 100 grammes, worth approximately 15,000 US dollars at current prices. The deputy finance minister stated officially that gold is being used as a substitute for foreign exchange, fuelling capital flight and money laundering. Analysts interpret the measure as an attempt to prevent ordinary Russians and oligarchs alike from moving wealth out of the country.

One analyst at Gold Forecast warned that markets should “expect a fire sale panic before the deadline hits.” The behaviour, according to observers, does not reflect a confident superpower but rather echoes Soviet era currency control measures driven by paranoia and fear.

The financial pressure on Russia carries policy implications for Western governments. The visible depletion of Russia’s gold reserves each month answers the question of whether sanctions are working. Russia’s gold cushion is melting away. Oil revenues are propped up only by the accidental windfall of conflict in the Middle East. Urals crude rose 71 percent in three weeks, as Euromaidan Press reports. Stripped of that temporary boost, the regime faces a fiscal abyss.

Questions remain for Western capitals. In Brussels, Berlin, and Washington, 300 billion US dollars of frozen Russian sovereign assets are still debated rather than transferred to Ukraine. Sanctions contain loopholes. European governments treat the Russian shadow fleet of oil tankers as a regulatory inconvenience or environmental matter rather than a strategic defence and security target.

The Kremlin is communicating in the only language autocrats understand, namely balance sheets. The pressure is working. The war has a financial floor, and Russia is approaching it. Every month of Western half measures provides the Russian dictator with time he cannot otherwise purchase with hard currency or gold. The gold is disappearing regardless. The question remains whether the West possesses the resolve to press harder and faster, compelling a realisation in the Kremlin that it cannot afford to expend everything on a war it cannot win.