After the West imposed import bans on Russian gold, the metal has not ceased operations, with the main channel redirected to Hong Kong. In 2025, Hong Kong is expected to import 92.1 tons of gold from Russia, a year-on-year increase of 42%, with a value of approximately HKD 82 billion, equivalent to USD 10.5 billion, surpassing Dubai to become the largest recipient of Russian gold.

After the U.S., U.K., and EU cut off traditional gold routes in 2022, trading initially surged to Dubai; following U.S. sanctions on Russian mining companies in 2023, Hong Kong's import volume has doubled continuously. There are no restrictions on Russian gold in Hong Kong. Meanwhile, data from Chinese customs shows that direct imports of gold from Russia to mainland China are expected to increase to about USD 3.3 billion between 2023 and 2025, fifteen times the previous amount, particularly concentrated in the fourth quarter.

The U.S. Treasury has named Hong Kong companies. The 2024 sanctions network includes VPower Finance Security, as well as Holden International Trading and Taube Precious HK, accusing them of converting sanctioned gold payments from the mining company Polyus through shell companies in the UAE and Hong Kong into fiat currency and cryptocurrency before flowing back into the Russian financial system. Hong Kong associates and Polyus employees have also been included. Once gold bars are melted and recast, the origin becomes difficult to trace, making transit hubs a blind spot for sanction enforcement.

At the same time, Hong Kong is enhancing its gold market infrastructure: the government-owned precious metals central clearing company will begin trial operations in July 2026, with Bank of China (Hong Kong) as the clearing bank and designated vault, and will connect with the Shanghai Gold Exchange's international board for Delivery Connect. In recent months, the People's Bank of China has increased its inventory in Hong Kong, with some reserves being relocated from London back to Asia. The Hong Kong Monetary Authority and storage companies are still competing for warehouse space after imports peaked, and the delivery volume of gold futures on the Hong Kong Stock Exchange has also set records due to the sanctions redirection.

During the Middle East conflict, some traders temporarily sold physical gold in Hong Kong at 15% to 20% below market price, indicating a rush to exchange ownership. Exports from Kazakhstan and Uzbekistan to Switzerland have unusually increased during the same period, suggesting that some of this may involve re-exporting Russian gold. London still controls the pricing window, but the weight of physical delivery and storage is shifting eastward.

Mechanically, this is a migration of ownership driven by sanctions, not ordinary speculation. The sellers are Russian mining companies and traders cut off from European and American refining and clearing channels, while the buyers are Asian vaults, mainland reserves, and intermediaries that can melt and re-label the gold without being constrained by Western bans. Funds are shifting from London’s unallocated gold accounts to deliverable inventories in Hong Kong and attempts at RMB settlement. Beneficiaries include Hong Kong storage, clearing licenses, and banks capable of connecting to Delivery Connect, while those under pressure are Western gold merchants who still rely solely on LBMA deliverable bars as the only compliance standard, as well as any Hong Kong shell companies that may face secondary sanctions.

Source: Public Information