However, the rest of the G7, which is holding a summit in Germany, will also join in with a formal unveiling of the sanction on Tuesday, a senior US official said.

“You’ll see that on Tuesday. This will be a G7 principal that is articulated,” said the official, who spoke to reporters on condition of anonymity.

With its economy already under huge pressure from Western sanctions against banks, energy companies, airlines, high-tech and consumer goods, the choking off of the gold market will have a significant impact, according to G7 officials.

Given London’s central role in the international gold trade, “this measure will have global reach, shutting the commodity out of formal international markets,” Britain said.

“Gold, after energy, is the second largest export for Russia and a source of significant revenue for (President Vladimir) Putin and Russia,” the US official said, adding that the blocking of Moscow’s gold sector “will further isolate Russia from the global economy.”

According to the White House, Russia accounted for about five percent of all gold exports in 2020 and 90 percent of Russia’s output went to G7 countries -- mostly to Britain.

Slow but steady sanctions

The attempt to clamp down on Russian gold is likely to be the most meaningful economic measure against Moscow announced at the G7’s three-day meeting.

Officials say that cumulatively all the sanctions are slowly but surely starting to eat deep into Russia’s economy and Putin’s longterm ability to continue the invasion of Ukraine, which is now in its fifth month.

While so far there have been few outward signs of the Kremlin feeling the pressure, the Western campaign is dealing something closer to death by a thousand cuts than any one dramatic blow, the senior US official said.

The gold measure is “an ongoing illustration of the types of steps that the G7 can take collectively to isolate Russia and cut it off from the global economy,” the official said.

“And those impacts only accumulate over time, such that Russia’s ability to produce, Russia’s ability to wage war are going to decline over time as a result of the collective steps the G7 has taken.”

Worth 12.6 billion pounds ($15.5 billion) to the Russian economy in 2021, gold is also a refuge commodity in times of turmoil. Russian oligarchs are believed to have rushed to hide their assets from Western sanctions enforcers by converting to the precious metal.

The London Bullion Market had already suspended six Russian refineries in action announced on 7 March.