Russians set record in gold purchases to protect savings amid sanctions

As the West continues to impose trade and financial restrictions on Russia, gold remains a key asset for preserving wealth in the country. With a growing domestic market and thriving national production, Russia continues to strengthen its position in the global gold market.

Russia reached a historic record in gold purchases in 2024, with citizens acquiring approximately a quarter of the country's annual production. Faced with Western sanctions and economic instability, Russians bought 75.6 metric tons (2.7 million ounces) of gold in bullion, coins, and jewelry, according to data recently published by the World Gold Council.

Surging demand for gold in Russia

The increase in gold acquisitions in 2024 represents a 6% rise compared to the previous year and an impressive 60% increase since President Vladimir Putin ordered the invasion of Ukraine nearly three years ago. This growth places Russia as the fifth country with the highest gold demand worldwide.

Russia is the second-largest gold producer globally, extracting more than 300 metric tons annually. However, due to Western sanctions imposed after the invasion of Ukraine, Russian gold has been rejected in key markets such as London and New York, significantly reducing its flow to these trading hubs.

Financial protection amid uncertainty

Since 2022, gold demand in Russia has grown significantly as citizens seek safe alternatives to protect their savings. Financial restrictions and the ruble’s depreciation have limited traditional investment options in dollars or euros, leading to increased gold purchases as a store of value.

The impact of Western sanctions has also complicated cross-border payments and caused shortages of foreign currencies in the country. Given this scenario, gold has become an increasingly popular option for Russian retail investors.

VAT removal to boost sales

To encourage gold purchases, the Russian government eliminated the value-added tax (VAT) on retail purchases of the metal immediately after the start of the conflict in Ukraine. This measure, which had been under discussion for more than a decade, has further boosted gold demand among Russian citizens.

As the West continues to impose trade and financial restrictions on Russia, gold remains a key asset for preserving wealth in the country. With a growing domestic market and thriving national production, Russia continues to strengthen its position in the global gold market.