Interest in the metal has been growing recently in light of the pandemic as one of the safest and most resilient assets for investors. Russia, however, started to build up its reserves long before the crisis emerged.

Russia has become a saviour of the global gold markets as the pandemic has spurred abnormally high demand for the precious metal while it has at the same time also crippled companies' ability to produce gold in the amounts requested by market players, the vice president of Russian gold industry giant Zolotoy Monetnyy Dom, Alexey Vyazovsky, says.

"When a pandemic or war emerges, gold is everyone's first choice to buy. But right now buying gold is problematic. Refineries where gold alloys are purified, mints where gold coins are minted, some banks and exchanges, all infrastructure, including even some mines are closed due to quarantine", Vyazovsky says.

The gold expert explains that Russia mines some 300 tonnes of gold each year and has huge amounts of gold stashed in reserves - something that is now saving the market. Vyazovsky stresses that the Russian government has allowed companies to export gold, with the main flows of the precious metal now going to the two main European gold hubs - London and Switzerland - which were experiencing acute shortages of physical gold.  

This situation turned out to be highly profitable for Russian gold companies, the expert notes. 

"Gold prices are on the rise in Russia as it's traded in rubles. So now the gold-mining companies are getting incredible profits", Vyazovsky says.

Russia has indeed been boosting its gold reserves for some time and started doing so long before the coronavirus pandemic hit the world. When Moscow started dumping its holdings of US Treasury bonds, it also started buying the precious metal, supposedly as a replacement for its dollar-nominated assets. In 2019, Russia became the biggest gold buyer in the world, closely followed by China.