In recent years, Russia has significantly increased its gold reserves to become one of the world’s largest holders of the precious metal. This strategic move has allowed the country to secure hard currency, weapons, and other goods, especially from countries like China, Turkey, and Iran. However, Western sanctions have disrupted Russia’s ability to trade in gold, leading to a slowdown in gold production within the country.
Before the invasion of Ukraine, Germany and the US were major suppliers of foreign mining equipment to Russia. However, with sanctions in place, Russia is now more reliant on Chinese supplies due to its outdated Soviet-era mining equipment. This shift has made it challenging for Russian gold producers to keep up with demand.
Despite these challenges, Russia holds considerable influence over the production of gold in Central Asia and Africa. The country’s extensive gold reserves play a crucial role in supporting its wartime economy and ensuring access to essential goods. John Kennedy, a research leader at RAND Europe, emphasizes that gold is a key component of Russia’s hybrid threat, and Western governments must remain vigilant as they continue to pressure Moscow.
As of November-December 2023, Russia was the world’s fifth-largest holder of gold reserves, trailing behind the US, Germany, Italy, and France. With ongoing sanctions impacting its gold trade, Russia’s strategy to use gold as a valuable resource remains under scrutiny in the international community.
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