Some sites like this one, this one, this one and some social media posts like this one refer to news articles saying that Russia has linked ruble to gold at 1 gram = 5000 roubles.

Also Forbes seems to refer to this in this article, stating that

By tying the ruble to gold, Russia pushes to make its currency independent of comparisons to the U.S. dollar.

Is this a same kind of gold peg that U.S. dollar had before Nixon administration removed it in August 15, 1971?

  • 2
    Since the price of gold is currently below 4000 RUB/g, it does not seem there is an actual peg in the sense that you can take 1g of gold and get 5000 rubles.
    – Henry
    Commented May 31, 2022 at 10:23

1 Answer 1


First, Russia has not pegged the ruble to gold. It sort of did for 10 days (sort of... we'll get to that in a moment), but reversed on April 8th. The article in Forbes is from a contributor, making it no more authoritative than a blog. Forbes published it May 2, and by then, Russia had reversed its decision for nearly a month. The other articles are no more authoritative than Forbes.

Let's look at it chronologically. On March 25th, Reuters reported that Russia's central bank would

start buying gold from banks and will pay a fixed price of 5,000 roubles ($52) per gram between March 28 and June 30.

This is what many people mistook for putting the rouble on the gold standard. Instead of continuing to do this until June 20, Russia changed its policy. About two weeks later, on April 7, Reuters reported that Russia's central bank would stop buying gold at a fixed price

Russia's central bank said on Thursday that due to a "significant change in market conditions" it would buy gold from commercial banks at a negotiated price from April 8.

The Reuters articles are very brief and have a paywall. You can read more about how Russia tied the price of gold to the rouble here without a paywall, A Note on the New Russian Gold Standard. Ignoring the expected Russia bashing (the source is the American Institute of Economic Research), this gives a good explanation of how Russia tied the rouble to the price of gold but that did not mean the rouble was a gold-backed currency. If anything, it was more like Russia was making gold into a rouble-backed medium of exchange:

On Friday, March 25, 2022, the Bank of Russia announced that it would set a fixed price for gold purchases made with rubles... At that time, the Bank of Russia stood willing to purchase gold from Russian banks at a fixed 5,000 rubles per gram, which set an effective “floor” on the ruble. At 31.1 grams per troy ounce, with the Russian central bank bidding for gold at 5,000 rubles per gram, one ounce of gold would be purchased for 155,500 rubles.

The AIER article was published on April 7, and continues with this explanation about why neither Russia's first tie of gold to the rouble nor the switch to negotiated prices is a gold peg similar to the US dollar prior to 1971.

But neither today’s shift nor the original ‘5,000 ruble per gram’ purchase measure constitutes a gold standard despite the enthusiasm of certain media pundits. A bona fide gold standard would require the Russian central bank to both purchase and sell (which is to say, exchange) gold and rubles; and to do so according to a fixed weight or quantity of gold per unit currency.

In the previous arrangement, the effective gold purchase price was at times lower than the world (dollar) price of an ounce of gold.

What does buying at "negotiated prices" mean?

To understand requires an explanation of why gold bullion is not as fungible as I had always thought. Specifically, bullion has a strike mark on it, identifying the source. The two largest Western gold bullion exchanges in the world refused to buy Russian gold bullion as of March 7, with no plans to resume doing so. London bullion market bars Russian gold refineries (Reuters):

The London Bullion Market Association (LBMA) said on Monday it had suspended its accreditation of six Russian precious metals refiners, meaning they will no longer be able to sell gold and silver in the London market, the world’s largest.

Because Russia could no longer use its gold to make transactions on lit (as in 'not dark') markets, it offered to pay a fixed price of 5000 roubles ($52) per gram. At that time, $52 per gram was LOWER than the gold market value of $68 per gram! The only reason anyone would want to sell gold to the Russian central bank at a discount from market prices would be if they were desperate for rubles or unable to access above-board gold dealers offering the world gold price in dollars.

AIER provides a few more details that round out the explanation for what Russia did and why:

Negotiated gold purchase rates will permit Russian authorities to set rates in line with the motivation of sellers, discounting for immediacy... Nations which are politically friendlier to the Kremlin will receive more favorable purchase terms. Among the gold sellers will be entities taking advantage of a rare opportunity for confidential liquidity provision, including elements of organized crime, terrorist groups, individuals with hidden assets and rogue states.

Despite all that negativity, AIER concludes by praising Russia:

Russia’s embrace of gold remains a positive step. Gold is tangentially being utilized to make an existing money more sound.

  • 1
    That last paragraph is such a jump from the the rest of the narrative that it makes me think there's something missing (or that I'm not understanding). Why does buying gold at a discounted rate make the rouble "more sound"?
    – IMSoP
    Commented May 31, 2022 at 15:57
  • 5
    @IMSoP Some people love the idea of gold tied to currency, no matter what. It is almost a cult thing. AIER likes the fact that gold is being used as part of paper money use, I think. Yes, it is a little strange, I agree! Commented May 31, 2022 at 15:59
  • 3
    Yes, this seems like only one half of a peg, and the easy half at that. To really be a peg, wouldn't they also have to be willing to sell gold at the rate of 5000 rubles per gram? That's the only direction that would prevent the currency from falling. A standing offer to buy gold for rubles could only keep the value ruble from rising above that level. Commented Jun 2, 2022 at 3:25
  • @NateEldredge yes, thar is my understanding too, i.e. it is half of a peg. A real currency peg controls up AND downside rate of conversion fluctuations. Commented Jun 27, 2022 at 7:08

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