Gold has served as a lifeline for Russia's government and economy following the aggressive sanctions imposed after the invasion of Ukraine. It has also served as a lifeline for the Russian people.
Russians bought a record amount of gold in 2024. According to a Bloomberg report, consumers consumed nearly a quarter of the country's annual gold production. In 2023, Russia ranked second in global gold production.
Russian consumers bought 75.6 tons of gold last year in the form of coins, bars, and jewelry, a 6 percent annual increase. Russian retail demand for gold in 2024 ranked fifth globally.
Since the invasion of Ukraine, demand for gold in Russia has skyrocketed by 60 percent.
According to Bloomberg, Russians have turned to gold in search of “alternative ways to secure their savings instead of traditional investments in dollars or euros.”
Aggressive Western sanctions have made it difficult to obtain dollar- and euro-denominated assets, forcing the average Russian citizen to seek ways to protect their wealth. Gold offers the perfect alternative: it is recognized as money around the world, accepted virtually everywhere, and carries no counterparty risk.
Holding gold also protects Russians from price inflation. Russia's CPI exceeded 9 percent annually in December. This has forced the Russian central bank to raise interest rates, which now stand at 21 percent.
The price of gold rose 28 percent in ruble terms in 2024 and is already up 10 percent so far in 2025.
The Russian gold rush highlights the nature of gold as money and its important role in the global economy. When fiat currencies cease to exist or fail, gold will always remain a viable alternative. This is precisely why many Russians are accumulating gold at a rapid pace.
Mike Maharrey, Money Metals