Central banks around the world have differing attitudes toward gold: some are reducing their holdings, while others are buying the dip.

21st Century Business Herald reporter Ye Maishui: Gold seems to be “cooling off.” Recently, the central banks of Turkey, Russia, and Poland have all stated that they have sold or are preparing to sell their reserve gold—especially the Turkish central bank, which has reduced nearly 120 tons in the past two weeks.

For some central banks’ moves, most market views believe that the overall pattern of gold buying has not yet been reversed.

A monthly report on central bank gold purchases released by the World Gold Council on April 2, 2026, shows that in February, central banks across countries net bought 19 tons of gold. This is lower than the monthly average of 26 tons reported in 2025, but it is higher than January’s net purchase of 5 tons. Some analysts have even said that the earlier decline in gold prices dug a “gold pit,” and now is a good time to buy gold.

Central banks of the three countries reduce or plan to reduce reserve gold

To cope with the energy supply shortages triggered by conflicts in the Middle East and the pressure of depreciation on the Turkish lira, Turkey’s gold reserves have fallen sharply by nearly 120 tons over the past two weeks, representing the largest two-week decline since 2013 with relevant records.

Data released by the Turkish central bank on the 2nd shows that, for the week ending March 28, the country’s gold reserves decreased by 69.1 tons, with a total decrease of 118.4 tons over the past two weeks, bringing Turkey’s total gold reserves down to 702.5 tons. Among them, more than half was completed via gold-for-foreign exchange swap transactions—i.e., using gold as collateral to obtain U.S. dollar liquidity, and then redeeming it after maturity.

The essence of swap transactions is “exchanging gold for foreign currency, redeeming at maturity,” meaning the central bank hands over gold to the counterparty in exchange for an equivalent amount of dollars, while also signing a forward contract to buy back gold at a slightly higher price in the future. This is a short-term financing activity, not a permanent liquidation.

Analysts believe that since the outbreak of the Middle East conflict, global energy prices have risen sharply. Turkey is highly dependent on imported energy, and the pressure on foreign-exchange payments has increased rapidly. At the same time, risk-aversion sentiment in the market has risen; the Turkish lira faces depreciation pressure; and the Turkish central bank has had to intensify its intervention efforts to support the lira’s exchange rate and improve market liquidity.

Poland’s central bank also proposed a plan in early March. On March 4, Poland’s central bank governor Adam Glapiński stated that it plans to raise about $13 billion by selling part of its gold reserves to support national defense construction.

Russia’s central bank, meanwhile, started selling gold as early as January this year. According to statistics from the World Gold Council, in January 2026, the Russian central bank sold 9 tons of gold, becoming the largest net seller for that month; in February, it continued to net sell 6 tons.

Regarding the recent “dumping gold” behavior by multiple central banks, Lin Yan, Chief Macro Analyst at Guolian Minsheng Securities Research Institute, believes that the recent gold selling by some central banks is more “tactical” than “strategic.”

The core reasons are threefold.

First is “following the trend” institutional behavior. In essence, central banks also play the role of “institutional investors” in gold. Taking the Turkish central bank as an example, when gold prices are in a period of consolidation, the Turkish central bank often sells gold; conversely, when gold prices accelerate upward, the Turkish central bank also accelerates its gold buying.

Second, the fiscal deficit rises rapidly in the short term, and central banks “passively” sell gold to meet liquidity spending. For example, after Turkey’s fiscal deficit rose quickly, the central bank may have to “sell gold out of necessity” to exchange for U.S. dollars. Likewise, after Russia’s fiscal deficit rose rapidly in 2025, the Russian central bank also began “passively reducing” its gold holdings to obtain funding to support the finances for the Russia-Ukraine conflict.

Third is the “see-saw” between central bank gold reserves and foreign-exchange reserves. Taking the Turkish central bank as an example, the transmission path of the “foreign-exchange reserves” versus “gold reserves” see-saw effect is: oil-price supply shocks → oil prices rise → the current account imbalance worsens → the lira depreciates faster → the central bank sells gold to increase foreign reserves. With the outbreak of the U.S.-Iran conflict, as concerns grow that the trade deficit will accelerate and lead to the lira depreciating too quickly, the Turkish central bank sold nearly 60 tons of gold in March.

Many institutions still expect gold’s performance this year to be bullish

In fact, over the past four years, central banks in various countries have been key buyers in the gold market. The World Gold Council data shows that from 2022 to 2024, global central banks recorded three consecutive years of average annual gold purchases exceeding 1,000 tons—about twice the average annual purchase level of the previous decade. Even in 2025, when gold prices hit new highs one after another, global central bank gold purchases still reached 863 tons, accounting for about 17.3% of global gold demand that year.

Although some central banks have reduced holdings recently, the overall gold-buying pattern has not yet been reversed. The World Gold Council’s monthly report on central bank gold purchases released on April 2, 2026 shows that in February, central banks net bought 19 tons of gold, below the 26 tons monthly average reported for 2025, but rebounding from January’s net purchase of 5 tons.

In addition, some central banks’ pace of gold buying has not stopped. Among them, the Czech Republic has net bought for 36 consecutive months; China has also increased its holdings for 16 consecutive months, accumulating 44 tons from November 2024 to February 2026; and Uzbekistan has maintained net buying for five consecutive months.

Research reports released recently by multiple institutions show that institutions still mainly take a bullish stance on gold. UBS strategist Joni Tewis expects that although gold prices have been volatile recently, this year’s gold prices will set new highs, viewing the recent pullback as a buying opportunity. UBS expects the average gold price in 2026 to be $5,000 per ounce, and in 2027 and 2028 to be $4,800 and $4,250 respectively.

Goldman Sachs is a firm supporter of the bullish case. On March 30, 2026, Goldman Sachs published a commodities research report, analyzing the reasons for the significant pullback in gold prices since the outbreak of the Middle East conflict, and reaffirmed its long-term bullish outlook on gold—expecting gold to reach $5,400 per ounce by the end of 2026.

The threefold factors supporting this forecast include: extremely low speculative positions (currently at the 39th percentile), which—if normalized—would provide upside momentum of about $195 per ounce; the Federal Reserve’s cumulative 50-basis-point rate cuts in 2026 expected by its economists, which would contribute about $120 per ounce; and continued support from central bank demand. The report expects average monthly purchases to rebound to about 60 tons, which would become a core pillar for medium-term prices.

The report also points out that risks are distributed in both directions but with a slight bias. The main short-term downside risk is that if the Strait of Hormuz disruption continues and leads to further adjustments in the stock market, it could result in the liquidation of remaining macro hedging positions; in the worst-case scenario, gold prices could fall to $3,800 per ounce. However, the medium- to long-term upside risk is more significant: if current geopolitical events accelerate the private sector’s diversification into gold and weaken the market’s confidence in Western fiscal sustainability, gold prices could rise further above the baseline forecast, with a maximum potential to approach $6,100 per ounce.

A quarterly report on the global economic outlook released recently by the Barclays research team states that since the outbreak of the U.S.-Iran conflict, all the gains in gold since 2026 have been fully given back, which creates a relatively reasonable entry opportunity.

Barclays says the trend of central bank gold purchases that have significantly increased since 2022 is unlikely to fade, and the Federal Reserve has also failed to achieve its 2% inflation target for four consecutive years, making it unlikely that there will be rate hikes in 2026. Risks from geopolitical frictions, central banks’ continued buying activities, upside inflation shocks from oil prices, and the conflict’s impact on fiscal conditions will all provide support for gold.

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