(Kitco News) - The U.S. continues to target Russia's massive gold reserves in an effort to sanction the country for its nearly year-long invasion of Ukraine.
Thursday, the U.S. House of Representatives passed the annual National Defense Authorization Act, which will boost defense spending to a record $858 billion next year.
However, the spending bill also includes an amendment that makes it difficult for Russia to use its massive horde of gold. The proposed legislation would directly sanction any U.S. entities that transact with or transport gold from Russia's central bank reserves.
The amendment is similar to a bill introduced in March by independent Senator from Main Angus King, Republican Senators John Cornyn of Texas and Bill Hagerty of Tennessee and Democratic Senator from New Hampshire Maggie Hassan.
"Russia's massive gold supply is one of the few remaining assets that Putin can tap to bankroll his country's violent, bloody expansionism," King told CNN in a statement. "By sanctioning these reserves, we can further isolate Russia from the world's economy and increase the difficulty of Putin's increasingly-costly military campaign."
Russia's central bank has the fifth largest gold reserves in the world at 2,298.50 tonnes, currently valued at $133.6 billion.
"Having this national security imperative in a national defense bill is a clear and powerful way to undercut Putin's illegal, amoral acts and make the financial pinch tighter," King added in his statement.
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| Sentiment in gold evenly split as prices end the week at a four-month high |
Russia's gold has been the target of sanction through 2022. In March, just after Russia invaded Ukraine, the London Bullion Market Association suspended six Russian gold and silver refineries from its Good Delivery list, effectively cutting Russia off from the London precious metals market. In June, leaders of the seven largest economies in the world banned imports of Russian gold.
However, some analysts have said that the western sanctions on Russia have had a negligible effect on the gold market. Russia can still sell its gold to China and Middle Eastern nations.
After passing the House, the legislation will now move to the Senate for a vote.
