G-7 to Expand Sanctions on Moscow With Ban on Russian Gold
U.S. official says the ban aims to punish Russia for invasion of Ukraine
The U.S. will join other leading countries in banning Russian gold imports, broadening a sanctions regime against Moscow as an international summit is set to begin Sunday, according to a U.S. official.
The move, coming as part of the Group of Seven meeting in the Bavarian Alps, is the latest part of an effort to punish Russia for its invasion of Ukraine, the official said, noting that gold is a major Russian export commodity after energy.
“The U.S. has rallied the world in imposing swift and significant economic costs on Russia to deny (President Vladimir) Putin the revenue he needs to fund his war,” the official said. “President Biden and G-7 leaders will agree to announce an import ban on new gold from Russia.”
Moscow’s aggression in Ukraine will be a focus of the three-day summit. Russia has been hurt economically by various sanctions. But it still sells energy to China, India and other countries not participating in the sanctions effort, and higher commodity prices have helped offset some of the impact of sanctions.
On Tuesday, the U.S. Treasury Department will enforce the ban on new gold imports in an attempt to “further isolate Russia from the global economy,” the official said.
Other G-7 members haven’t publicized their stance on the ban, and U.S. officials didn’t elaborate on the specific timing of an official announcement. A spokesman for the German government, which currently holds the G-7 presidency and hosts the group’s summit, didn’t immediately respond to a request for comment.
Russia’s central bank holds more than 2,000 metric tons of the precious metal, worth roughly $140 billion and representing the world’s fifth-largest stash, according to the World Gold Council.
Analysts say the ban could push up the haven metal’s prices, which have been sliding so far this quarter because of higher interest rates and a stronger U.S. dollar. Those declines come despite the inflation rate reaching its highest level in four decades.
Investors prize gold for its stability in times of turmoil, expecting it to hold value even when other assets decline.
The ban on Russian gold is “only going to make the supply a little bit tighter, which should put a floor on what’s happening to gold,” said Mike Boutros, a strategist at DailyFX. Russia accounts for roughly a tenth of the global supply of gold.
A White House spokesman, John Kirby, declined to specify which actions against Russia would come. “There will be some announcements,” he told reporters aboard Air Force One as President Biden flew to Germany on Saturday. “There will be some muscle movements.”