Sanctions impact Russia's ability to sell gold hoard

 Washington Examiner:

Russia stored up nearly $140 billion in gold to bail itself out of a financial crisis but is finding it nearly impossible to offload the bullion now that one has happened, thanks to Western sanctions.

Russia spent years quietly buying up a massive trove of gold, the world’s fifth-largest. President Vladimir Putin recognized that gold was an asset that could be used to shore up Russia’s currency, the ruble, should its value collapse due to sanctions.

But now it seems Putin has bitten off more than he can chew by waging war in Ukraine because, experts say, it will be very difficult for that $140 billion hoard to be sold internationally.

Sanctions are prohibiting institutions in the United States, the United Kingdom, and the European Union from doing business with Russia’s central bank — so those buyers are obviously off the table. But because of the pressure against Russia, it would also be challenging, and likely unrewarding, for other countries to try to buy that gold.

FEARS GROW OF A CORNERED RUSSIA CUTTING OFF NATURAL GAS TO EUROPE

“He’s miscalculated here. The reputational risk against third-party countries and their central banks and the fear that the West will retaliate against them is greater than wanting to get gold at a discount price and deal with Putin,” said Scheherazade Rehman, a professor of international finance at George Washington University.

...

I also think Putin is unlikely to cut off its main source of income with the sale of natural gas.  Putin has started a war that is unpopular at home and abroad and he will have trouble selling his gold to shore up the Russian economy.  His best bet is to quickly cut a deal with Ukraine and pull his troops out.  He may be too emotionally unstable at this point to make such a logical move.

See, also:

Sanctions 'starting to BITE' in Russia: Tanking value of rouble, Soviet-era food shortages and Putin going cap in hand to China shows how Western trade bans and penalties are having 'enormous' impact on Kremlin

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