The golden strategy helps Russia neutralize 16,000 Western sanctions

(Dan Tri) – Despite the West continuously imposing sanctions, the Russian economy still grows by 3.6% in 2023 and is predicted to grow by 2.6% in 2024.

Russian President Vladimir Putin at the Kremlin (Photo: Arina).

The question is why Russia can overcome about 16,000 sanctions imposed by economies considered to be the strongest in the world.

Asia Times newspaper quoted experts as saying that the secret to helping Moscow overcome the surrounding sanctions is the golden strategy.

Western economic sanctions mainly target shipping and trade with Russia, while the gold market is almost unaffected.

More than 2 years ago, after Russia launched a special military campaign in Ukraine, Britain, the world’s largest gold trading center, banned all gold imports into the country.

According to the World Gold Council, Russia is currently the second largest gold producer in the world with 324.7 tons in 2023, just behind China.

Russia has been preparing for Western sanctions since 2013, that is, before Moscow annexed the Crimean peninsula based on the results of a controversial referendum.

In early 2022, Russia pegged the local currency exchange rate (ruble) to gold.

Russia’s aim is to switch to the gold standard so that the ruble becomes a reliable substitute for gold at a fixed exchange rate.

Normally, the basic reason to reserve gold is to use it to settle transactions with foreign countries at home and abroad.

Usually countries want to reserve gold, seeing it as a safe haven asset  against global financial shocks.

UK, US, Canada may not buy gold from Russia, but other countries still buy.

Another major customer is Switzerland.

Russian gold is trading freely at peak prices while avoiding all of the 16,000 Western sanctions.

However, for Russian President Vladimir Putin’s economic recovery plan through gold to be effective, gold needs to increase in value.

Gold is considered a collateral asset during periods of inflation and currency devaluation.

Western policies and actions alone will not be able to reverse this.