Russia's gold and foreign exchange reserves have grown to a record $713 billion. Analysis

By October 1, Russia's international reserves had grown by $23.8 billion, reaching $713.3 billion. Since the beginning of this year, their total growth has exceeded $104 billion. At the same time, by the end of 2025, gold may rise in price by about 10%. The reason for the increase in gold and foreign exchange reserves is in the Izvestia article.

Increased stability

• Gold and foreign exchange reserves, which include an increasing share of monetary gold, allow the Central Bank to maintain the stability of the ruble and regulate the exchange rate of the national currency in case of fluctuations in world markets. The higher the volume of gold assets, the more reliable the financial cushion that protects the economy from shocks, be it sudden changes in oil prices, currency fluctuations, or new sanctions restrictions. Gold is also used as a tool for diversifying reserves, reducing dependence on the dollar and the euro, which partially remain inaccessible due to restrictions.

• The growth of the gold reserve strengthens the confidence of international partners and investors in the solvency of the state, as this metal has historically been perceived as a standard of value that is not subject to depreciation. The presence of significant amounts of gold makes it possible for Russia to conduct foreign trade, bypassing dollar settlements, and in some cases use the metal as a means of mutual settlements with friendly countries.

• In addition, the accumulation of gold contributes to the strengthening of sovereign monetary policy. The central Bank gets the opportunity to form reserves independent of foreign institutions, which is especially important with limited access to global financial markets. Together, these factors make the economy more resilient to external shocks, increase the ability of the state to withstand prolonged sanctions pressure and maintain macroeconomic stability even under unfavorable conditions in the international arena.

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The sanctions fight

• After the introduction of Western sanctions in 2022, the Central Bank lost the ability to freely dispose of a significant part of its assets. At the same time, gold reserves and funds placed in Chinese yuan were not subject to restrictions. Changes in reserves are now formed mainly due to the revaluation of foreign currency assets relative to the dollar, the application of the budget rule and operations related to the National Welfare Fund.

• As a result of the sanctions pressure, Russia has lost access to almost half of its reserves — about $300 billion. The Kremlin said that the actions of Western countries represent not just an attempt to appropriate Russian funds, but an outright act of embezzlement.

• In response to the blocking of assets abroad, special "C" type accounts were introduced within the country. Payments on securities of Russian companies owned by foreign investors are credited to them. However, funds can be withdrawn from such accounts only after receiving permission from the government commission.

• According to a study conducted by Invesco among representatives of sovereign wealth funds and central banks, many countries have begun to return their gold reserves due to sanctions imposed by Western states on Russia. This is due to the fact that the blocking of Russian assets has become an alarming signal for the global financial system and has made us think about the security of placing national reserves abroad. Most of the financial institutions surveyed acknowledged that the incident had undermined confidence in Western vaults and international settlement mechanisms. More than half of the respondents — about 58% — indicated that after these events gold began to be perceived as a more reliable and attractive instrument of value preservation.

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Cost change

• By the end of 2025, gold can add about 10% in value. On October 7, an ounce was worth approximately $3,957, and precious metal futures rose above the $4,000 mark for the first time in history. The increased interest in this asset is attributed to the growing international tension and the temporary shutdown of the American government caused by the inability of Congress to approve the budget for the new fiscal year. If current trends continue, the price may reach the level of $4,300 per ounce by December 2025.

• Sharp fluctuations in the market make long-term forecasting difficult. However, in the medium term, gold may rise in price to $4,500, but a downward movement is also possible — up to $ 3,500, since current quotes exceed fundamental values. The spot price reflects the value of the metal in real time, whereas the futures is a contract for a future purchase or sale at a predetermined price. In other words, it reflects the expectations of market players regarding price dynamics in the future.

Experts attribute the growing interest in gold to a series of political and economic shocks. The US shutdown was just one of the factors pushing the quotes up. Market participants expect the Federal Reserve to continue easing monetary policy, possibly cutting the rate to a range of 3.75-4.00%. Against the background of such expectations, investors traditionally seek to transfer funds to more reliable assets, and gold once again becomes a "safe haven" for capital. Additional support for prices is provided by increased purchases from central banks and an increase in the share of metal in the reserves of various countries.

• As for investments in 2025, the expert community advises considering gold as a tool to protect against inflation and a way to save money, rather than as a source of quick profit. Despite the significant increase in quotations, the asset may be subject to correction to the level of $ 3,600. A more balanced option is bonds issued by reliable Russian issuers, which can provide returns of over 20% per annum. Investments in precious metals are justified over the long term, while short-term purchases carry increased risks and may be inferior in profitability to risk-free instruments such as deposits and government securities.

When writing the material, Izvestia interviewed:

• Andrey Kolganov, an economist and Chief researcher at the Institute of Economics of the Russian Academy of Sciences;
• Doctor of Economics, Professor of the Financial University Alexander Safonov.