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“Russia increasingly relies on Chinese yuan reserves and gold sales to cover its budget deficit”

Those Chinese yuan reserves are generally not some pile of long term investment that they are withdrawing from, but rather they are the current income received for Russian commodity sales to China (or to others, like India, denominated in yuan). The Government has simply been taking more of those earnings than before, and blowing them on the war.

The Gold reserves however, do represent the significant spending down of long term savings (in addition to their ongoing gold production). Russian gold has been flooding into Chinese and Hong Kong markets. Since they have switched emphasis from spending down the liquid part of their National Wealth Fund, it appears that drawing down their Gold Reserves has increased to cover that shortfall.

Those are their two main pots of financial reserves, and they never want either to hit zero, so they will likely shift policies as they approach minimal levels. In total, their financial reserves continue declining, at a fairly robust rate (unsustainable, long term).

The true quantity of their remaining gold reserves is fairly opaque, and gold is amenable to covert transactions, so we won’t see accurate direct reports of the remaining balance. We will have to watch for indicators that the hoard is emptying out, and they may happen rather abruptly, as the managers try to conceal it until the last moment.

When the gold runs low, the remaining “liquid” part of the National Wealth Fund (itself already low) will be the remaining reserve backstop. A lot of that is invested in the declining Russian stock market. Suddenly withdrawing it, would likely drag that market down significantly, and could trigger a crash. That could be an indicator of the gold reserves running low.

The Russian Government started the war taxing more of the profits from the oil and gas industries, to near the level of effective Nationalization. Now they have gone beyond that, and passed broad economy-wide tax increases on businesses and individuals.

Another likely action by the Russian Government, to manage their financial shortfall (as reserves run low), will be to increase the rate of printing new rubles (already at a very high inflationary rate), even higher. There is likely no end of high inflation in Russia, until a couple of years after the end of the war, and a high risk of it accelerating at some point, especially if there are shocks (like a currency collapse).

So they are spreading around the costs of the war (taxing, printing, and spending down their reserves), but their reserve buffers are declining (likely to negligible levels in 2025, ceteris paribus), and the negative secondary effects of their actions are are accumulating (inflation, bankruptcies).

Russia is so vulnerable to new economic shocks now, like dropping oil prices, currency collapse, or significant new sanctions. It looks like a wave of bankruptcies is starting to hit the fan over there already.