Gold has become one of the most talked-about assets this year, and the surge in global demand is now being linked to growing geopolitical tensions. Russia’s central bank said on Thursday that emerging market economies are increasing their gold purchases partly because of attempts by the G7 nations to use Moscow’s frozen assets. This trend, according to Russian officials, is reshaping how central banks think about security, trust, and diversification in their international reserves.
Gold prices have already had an extraordinary year. The precious metal is on track for its biggest yearly rise since 1979. Prices have climbed 59 percent so far, reaching a record high of 4,381 dollars per troy ounce on October 20. Investors are turning to gold as a haven, particularly at a time when geopolitical tensions are high and uncertainty continues to cloud the global economy. Concerns over the stability of world trade, especially with rising U.S. tariff risks, have also driven investors toward assets that feel more reliable during periods of global stress.
Russia’s central bank said investor interest in gold has been rising because people are unsure about the direction of global growth. With major economies facing slower expansion, higher interest rate volatility, and political uncertainty, many investors see gold as a hedge that can hold its value when other markets experience turbulence. Unlike currencies or bonds tied to specific countries, gold is viewed as a universal asset, one that does not depend on the financial policies of any one government.
However, Russia argues that there is an additional layer behind this gold rush. According to the central bank, emerging market countries are accelerating their gold buying because they want to diversify their reserves in response to the ongoing discussions by the G7 about using Russia’s frozen assets. These countries fear that if major powers can consider freezing and reallocating assets belonging to one country, they could potentially do it to others in the future. The desire to reduce dependence on U.S. dollars and U.S.-controlled financial systems has therefore increased.
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The scale of Russia’s frozen assets helps explain why this debate has become so significant. Out of some 300 billion dollars in Russian assets that were frozen after the invasion of Ukraine, 210 billion euros are held in Europe alone. A large portion of this, about 185 billion euros, is parked in Euroclear, a major central securities depository based in Brussels. The fact that such a large sum of state-owned financial reserves can be immobilized has prompted many central banks in emerging markets to rethink how they store value.
Gold, unlike cash held in foreign banks or government bonds issued abroad, cannot be frozen in the same way. It can be stored domestically, beyond the reach of international sanctions or political decisions. This makes gold especially attractive for countries that fear their assets could be targeted during geopolitical conflicts. The more uncertainty these nations feel about the reliability of international financial systems, the stronger their incentive to increase gold holdings.
This trend comes at a time when global politics are more unpredictable than ever. Relations between major powers remain tense, debates over trade rules continue, and several regions face escalating conflicts. All of these factors contribute to a climate where countries want greater protection against external financial pressure. Gold has therefore become not only a symbol of wealth but also one of security.
As 2025 progresses, analysts expect gold demand to remain strong. With record prices, rising central bank purchases, and intensifying geopolitical debates, the precious metal continues to play a larger role in how nations manage their financial stability. Whether the G7 eventually decides on the use of Russia’s frozen assets or not, the global move toward gold suggests that countries are preparing for a world where economic security matters more than ever.
