Russia has officially overtaken China to rank fifth in the world for the largest central bank holding of gold bullion, with only the US, Germany, France and Italy ahead of it.

Driven by sanctions from the United States and other western allies, Russia registered record high purchases of gold in 2018 of 8.8 million troy ounces; a rise of 18.19% from the 7.2 million ounces in 2017.

Russia’s Central Bank has been building up the nation’s gold reserves for over a decade, with President Putin having been previously vocal about his unhappiness with the pressure that the US Dollar puts on countries and currencies that the United States are not happy with.

In May last year, Putin told Russia’s lower house of Parliament, the State Duma, that “the monopoly of the US dollar is not reliable enough, it is dangerous for many’’. Putin has been vocal about his grievances with the greenback, having allegedly described the US as a parasite at one point. The Russian president later told media outlets that he meant “America is being parasitic with the Dollar's monopoly position”.

The logic behind the transition from US Treasury bonds and Dollar holdings to gold is that the bullion cannot be frozen or blacklisted from trading, thus circumventing sanctions implemented against the Kremlin.

Statistics from the Russian Central Bank report that as of January 1, 2019 the bank is in possession of 67.9 million ounces of gold. The information released to the press also detailed a reduction in Dollar reserves – down to 24.4% - and an increase of the Euro to 32% and the Yuan to 14.7%.

China has restrained from increasing its holdings in recent years, which has allowed Russia to knock it into sixth place, but the world’s second largest economy did report a small rise of 400,000 tonnes of bullion for its reserves.