Russia has sold significant volumes of gold in 2026 to raise cash as defense spending for the war in Ukraine continues to strain the federal budget.

Russia has sold significant volumes of its gold reserves in 2026 to help cover a growing budget deficit. Data from the Russian Central Bank shows reserves fell by approximately 43.5 metric tonnes since the start of the year, leaving holdings at their lowest level since before the February 2022 invasion of Ukraine. The sell-off is estimated to have raised over $5 billion.

Budget Pressures and Defense Spending

The Russian government faces significant financial strain due to increased defense spending, which has more than quadrupled since 2021. Government data indicates that the 2026 budget deficit is projected at 1.6% of GDP, or approximately $40 billion, with potential for further overspending. While oil and gas revenues have provided some relief, analysts note that the country's ability to finance the war remains heavily dependent on these energy prices.

Role of the National Welfare Fund

Financial analysts suggest the gold sales are primarily conducted by the finance ministry through the National Welfare Fund (NWF) rather than the Central Bank. The fund, estimated to be worth $150 billion with $50 billion in liquid assets, uses gold as a key component to maintain liquidity. Because Russia is a major gold producer, experts note the country can replenish its stocks by purchasing from domestic producers.

Economic Outlook and Long-term Impact

While experts do not view the gold sales as a sign of immediate financial collapse, they warn of long-term economic distortions. Analysts suggest that while Russia can likely sustain its current war spending for the next 12 to 24 months by cutting non-defense expenditures, the current fiscal approach is creating divisions within the government regarding the country's future economic trajectory.