FX diversification into Gold has continued after sanctions on Russia, economists at MUFG Bank report.

Gold is popularly viewed as an inflation hedge

“Gold is seen as a safe and desirable reserve asset in periods of high economic, financial and geopolitical uncertainty, and when returns on reserve assets are low. As has been the case in recent years. It is also popularly viewed as an inflation hedge.” 

“Gold is perceived as a safe and desirable reserve asset when countries are subject to financial sanctions and when financial investments are potentially subject to asset freezes and seizure. The sanctions imposed on Russia have boosted the appeal of Gold in recent years.”