Gold Ban Headlines G-7 Summit

As leaders of the globe’s top industrial nations met for the G-7 Summit in Germany, war raged in Ukraine, COVID-19 continued spreading, and consumers around the world confronted the twin threats of inflation and recession, it was gold that grabbed the headlines at the outset of the annual meeting. 

“G-7 to Ban Russian Gold,” screamed headlines around the world, reflecting gold’s global economic and symbolic importance.

In fact, it was leaders of four nations—United States, the United Kingdom, Canada and Japan—that immediately agreed to ban imports of Russian gold to punish Russia for its unprovoked invasion of Ukraine. The other G-7 nations—Japan, France, and Germany—later signed onto to the pledge to reject Russian gold.

The leader’s communique stated, “We remain steadfast in our commitment to our unprecedented coordination on sanctions for as long as necessary, acting in unison at every stage, and will reduce Russia’s revenues, including from gold.”

Several other non-G-7 nations joined in the declaration, including India, which is the world’s second largest consumer of gold.

While the ban generated headlines, its announcement was largely symbolic because the world gold industry had already taken major steps to block Russia from generating income from gold mining. The precious metal is one of Russia’s most important exports, having generated $19 billion in 2020. The London Bullion Metals Association had already dropped Russian refiners from its list of approved gold refiners, and the CME Group, operator of U.S. futures markets had banned the use of new Russian gold for settling trades. Still, President Biden and the other G-7 heads of state highlighted their unity on the issue because of the precious metal’s importance to both Russia and the world economy.