Russians are buying more gold to protect their economies after Vladimir Putin’s invasion of Ukraine caused the ruble to collapse, and restrictions on the Russian government made it difficult to buy foreign currency or withdraw money from the country.
Increased interest in gold led the Russian Central Bank to boycott on Tuesday, 15th, purchases of the metal by banks “to create conditions to meet the demands of families.” According to the Central Bank of Russia, the demand for gold was stimulated by the abolition of the tax 20% off metal purchases.
Russia’s largest bank, Sberbank, said last week that demand for the metal had quadrupled. The country’s largest creditor is Sberbank He said last week that demand for gold has quadrupled and plans to increase the number of offices selling the precious metal “to help people protect their savings”.
In periods of instability and insecurity, it is common for investors to leave risky assets in search of safer ones. Metal is one of the most traditional assets for storing value and has long been used as a weight for currencies, so it has always been used as a protection in times of economic stress. The metal’s near-universal acceptance as an asset makes it equivalent to foreign currencies at times when governments limit access to other currencies. A Troy ounce was set at $1,929 on Tuesday. The metal reached $2,051 last week. Since the beginning of the armed conflict, the value of gold has increased by 7%.
Penalties
The Russian Central Bank has lost access to nearly half of its foreign exchange reserves and has been blocked by the United States, the European Union, and the United Kingdom. The government can still access gold and yuan reserves, but the sanctions make it difficult for the central bank to trade gold.
Russia has imposed a series of measures to stem the ruble’s decline, including raising interest rates to 20%, temporarily banning banks from selling cash to citizens who do not yet have currency exchange accounts, and limiting transfers abroad.
However, the currency has fallen by a third so far this year. This Tuesday, one ruble is equivalent to 106 dollars. Before the invasion, the ruble was worth $81.
Charlotte Whitmore is a contributor at Mediarunsearch.co.uk, covering a broad range of topics including news, politics, business, technology, sport, entertainment, and lifestyle. She focuses on delivering clear, balanced reporting and practical information that helps readers stay informed about current events and emerging developments. Her work highlights stories that matter to everyday audiences, with an emphasis on accuracy, relevance, and accessible journalism that keeps readers connected to the issues shaping the UK and beyond.