Russia Now Sells More Gold Than Gas As Global Buyers Turn To Safe Assets In Turbulent Times

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Russia, the world’s largest producer of gold, exported more gold than gas in the second quarter of 2020 for the first time in almost 30 years. Gold sales to foreign buyers came in at US$3.6 billion in April and May, according to figures from Russia’s federal customs service — ahead of an estimated US$3.5 billion in gas sales for the full quarter.

This was the first time since 1994 that gold exports have exceeded gas sales, according to Maxim Khudalov of the Analytical Credit Rating Agency (ACRA).

Gold exports also jumped significantly, rising 14 times higher than in the same period last year. Gold prices have moved in the opposite direction from energy commodities since the start of the pandemic — up 19% this year — with the precious metal retaining its status as a safe haven asset in times of crisis.

Russia’s Central Bank also halted its own gold buying operations on 1 April in line with its fiscal rule, a mechanism which freezes Russia’s purchases of foreign currency and gold when oil prices drop below US$42 a barrel. That move influenced Russian sellers who would usually offload their gold to the Russian Central Bank, but instead took advantage of the market global sentiment to sell overseas. International Governments and Banks will often turn to solid items such as precious metals in times of economic stress.

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Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.

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