Countries set to ban Russian gold announced

Britain and the US, along with allies like Japan and Canada, will announce a ban on new imports of Russian gold during Sunday’s G7 summit, according to a UK government statement.

“This measure will have global reach, exclude the commodity from formal international markets” and have a “huge impact” on Moscow’s potential to generate global revenue, the statement said, adding that the move is underpinned by London’s pivotal role in metal trade.

Shipments between Russia and London have been reduced to almost zero since the western allies imposed unprecedented sanctions on Moscow over its military operation in neighboring Ukraine. The London Bullion Market Association, which sets the standards for the market, removed Russian gold refiners from its accredited list in March.

Earlier this week Reuters reported that EU leaders are considering gold as one of the targets for the next round of sanctions against Russia. However, the agency source did not clarify whether the move would affect gold exports, imports, or both.

The measure announced by London will apply to gold leaving Russia for the first time, and the US Treasury is expected to issue a ban on Tuesday, a person familiar with the plan said, as quoted by Bloomberg.

Washington in April banned US persons from conducting gold-related transactions with the Central Bank of Russia, the National Wealth Fund, and the Ministry of Finance.

While western sanctions have largely sealed off the European and US markets for gold from the world’s second-largest precious metals prospector, the G7 move is expected to completely cut Russia off from the world’s two main trading hubs, London and New York.

According to UN Comtrade data cited by the agency, the $15 billion in Russian gold that arrived in London last year accounted for 28% of Britain’s gold imports. Russia still has options to sell the precious metal directly to refiners or to look for new buyers like China, India, and the Middle East, which have not backed sanctions and are not part of the G7.