(JustPatriots.com)- Standing with the Group of Seven and its European Union allies, the US announced that gold transactions with Russia are prohibited. This move is the latest in a series of sanctions meant to punish Putin for invading Ukraine.
Americans are blocked from participating in any gold-related arrangements involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation.
The United States targets Russian gold reserves and has warned that attempts to go around these sanctions and conduct any gold-related agreements with Russia are strictly prohibited.
The sanction bans gold dealers, distributors, wholesalers, buyers, and financial institutions from buying, selling, or facilitating gold-related business agreements involving Russia.
The move is designed to restrict further Moscow’s ability to use its international reserves to prop up its war efforts.
With the Russia-Ukraine war entering its second month, the west has taken this new action hoping that it will destabilize Russia.
The move prevents innovative financial transactions with countries that continue to do business with Russia.
Russia has between $100 billion to $140 billion in gold reserves, and the US says Russia has used gold as a currency to circumvent the effect of sanctions in the past.
Gold makes up roughly one-fifth of Russia’s foreign-exchange reserves. According to figures from its central bank, they also have a mix of euros, dollars, and Chinese yuan.
According to the World Gold Council, Russia’s $140 billion in gold represents more than 2,000 metric tons of metal. That is the world’s fifth-largest stash, a reserve built up in recent years, including purchases from domestic producers. The gold is stored in vaults in Moscow and around the country.
With this amount of gold, one technique to avoid sanctions is to swap the gold for more liquid foreign exchange that is not subject to current sanctions. Another way is to sell the bullion through gold markets and dealers.
Gold could also be used “as cash” to purchase goods and services from willing sellers.
It is possible that Russia can find ways to sell its reserves. Venezuela did when trying to avoid U.S. sanctions in the past. They routed some of its gold through countries such as Turkey and Uganda.
