The Russian central bank cut its gold reserves through September for the tenth month running, selling at a pace last seen in 1998. That was the year of the default, the ruble’s collapse and the implosion of the GKO pyramid scheme (GKOs were Russia’s short-term government bonds, whose unraveling helped trigger the crisis).
Central banks across much of the world are lining up to buy bullion. Moscow is moving the other way.
The fastest pace since the 1998 crisis
Figures released by the Bank of Russia and picked up by the Moscow Times describe a steady hemorrhage. Another 200,000 troy ounces left the reserves in September alone, roughly 6.2 metric tons. At the start of October the vaults held 72.8 million ounces, the lowest level since the end of 2019. Since the sell-off began in December, the running total comes to 2 million ounces, or about 62 metric tons.
The comparison with the crisis of the late 1990s is closer than it may seem. In 1998, according to International Monetary Fund statistics, the central bank sold 3.8 million ounces (118 metric tons) in just three months. Before the year was out it bought back part of the metal and ended with a net decline of 1.6 million ounces, about 50 metric tons. On an annual basis, Russia in 2026 is already shedding more gold than it did in the year it went bankrupt.
That carries weight in a country with five outright defaults in its history, in 1839, 1885, 1918, 1991 and 1998. In 2022 it was deemed to have missed coupon payments in foreign currency that sanctions had blocked, even as it insisted it had honored its obligations.
Against the grain of other central banks
Moscow’s choice stands out even more against World Gold Council data. In the third quarter of 2026, central banks added 321 net metric tons of gold to their reserves, 42% more than in the same period of 2025 and the fastest pace since the end of 2024. That brings purchases since the start of the year to 675 metric tons. China tops the list of declared buyers with 63 metric tons, followed by Poland with 41. Russia was the only major seller, offloading just under 19 metric tons in the quarter.
Where the Russian metal ends up remains an open question. Western sanctions have shut the doors of London and New York to it, and the flow has found its way east. Hong Kong trade data analyzed by the Financial Times shows the city imported 99.71 metric tons of gold of Russian origin in the first seven months of the year, a record and nearly triple the same period in 2025. Much of that bullion then moves on to mainland China, which, like Hong Kong, has not adopted restrictions on Moscow’s gold.
Why Moscow is selling
Behind the sell-off is a budget increasingly starved of resources. The Finance Ministry projects a deficit this year of 7,345 billion rubles, equal to 3.2% of GDP and nearly double the 3,786 billion written into the budget law. To cover it, the government is drawing on the National Wealth Fund, Russia’s sovereign wealth fund.
The mechanism is indirect but straightforward: the central bank sells on the market the fund’s gold that the ministry has already used to plug budget holes. According to Finam analyst Alexander Potavin, the sales also ease a shortage of foreign currency liquidity, and gold’s still-elevated price has in all likelihood encouraged the decision.
Spending pressure shows no sign of letting up. The draft budget for 2027 allocates 17,100 billion rubles to defense, about 202.6 billion dollars. That is 27% more than was projected just a year ago and roughly 35% of total federal spending of 48,800 billion, the highest share since the invasion of Ukraine began. The government aims to hold next year’s shortfall to 5,443 billion rubles, or 2.2% of GDP, a target that also depends on new taxes and heavier borrowing.
After the gold, the privatizations
When reserves are no longer enough, the family silver goes up for sale. Rosimushchestvo, the federal agency that manages Russian state property, began on November 3, 2026 the selection of the intermediary that will organize the sale of 7.8% minus one share of Sovcomflot, the country’s largest shipping company. Applications close on November 17, 2026. At current market prices, the deal is worth about 15 billion rubles, around 184 million dollars.
The stake amounts to just under a tenth of the state’s holding. The government owns 82.8% of the company, listed in Moscow since 2020, and after the sale would fall to 75% plus one share, keeping firm control.
Sovcomflot is under sanctions from the United States, the European Union and the United Kingdom for its role in transporting Russian energy exports, and is accused in the West of having fed the so-called shadow fleet that Moscow uses to circumvent oil restrictions. The stock lost nearly 4% on the day of the announcement, a sign that the market fears a steep discount will be needed to place a stake of this size, or perhaps a private negotiation with a buyer chosen in advance.
The Aeroflot precedent counsels caution. Rosimushchestvo announced the sale of 23.76% of the flag carrier in May, but months later the deal has still not materialized, and the Finance Ministry now speaks of a sale by the end of this year or in 2027, depending on market conditions. That timeline says a great deal about how hard it is to find buyers for the assets of a country under sanctions, and it suggests that gold remains the quickest route to balancing the Kremlin’s books.
Editor’s note
This article was originally published in Italian on money.it by Flavia Provenzani on November 05, 2026 as «La Russia vende oro come non accadeva dal default del 1998. E ora mette sul mercato anche la flotta». It has been translated and adapted for an international audience by the Money.it International desk.
