What secrets lie behind central banks' shift from purchasing thousands of tons annually to dumping gold? Is it still worth holding onto gold?
2026-04-15 09:40:04
Central bank gold purchases hit a record high between 2022 and 2024, primarily driven by emerging markets; however, in 2026, influenced by the US-Iran conflict, high oil prices, and inflationary pressures, some central banks turned to selling gold to stabilize their currencies and obtain liquidity. On Wednesday (April 15) during Asian trading hours, spot gold fluctuated around $4,845 per ounce, after rebounding in the previous few trading days due to a weakening US dollar index.
Gold prices face some short-term pressure, and the cash price is still far from the historical high of $5,596.33 reached at the beginning of the year. However, experts believe that this move is an expedient measure to deal with a sudden crisis and has not changed the strategic status of gold as a long-term reserve asset.
Global central bank gold purchases have reached unprecedented levels in recent years. From 2022 to 2024, central banks made net purchases of over 1,000 tons of gold annually, far exceeding the average level of the previous decade. Although the pace slowed somewhat in 2025, net purchases still reached 863 tons for the year, remaining at a historically high level.
This wave of buying was primarily driven by emerging market central banks, which are increasing their gold reserves to diversify risk and reduce their reliance on dollar assets . Poland, India, and Turkey are among the major buyers. Data from the World Gold Council shows that central bank gold purchases have become a key structural force supporting the long-term rise in gold prices, with continued buying even as gold prices have repeatedly hit new highs .
Entering 2026, some central banks shifted to selling or suspending gold purchases, mainly due to the escalating conflict between the US and Iran and the potential blockade of the Strait of Hormuz. The conflict led to high and volatile oil prices, pushing up global inflation expectations and reducing the scope for interest rate cuts. This high-interest-rate environment diminished the attractiveness of gold, which yields no interest .
Furthermore, emerging markets face pressure on their currencies to depreciate, leading some central banks to sell gold to obtain dollar liquidity and stabilize exchange rates and their domestic financial markets. Following the breakdown of US-Iran negotiations, rising energy prices have further exacerbated inflation concerns, requiring central banks to prioritize short-term economic stability rather than long-term reserve diversification .
Experts point out that such sales are mostly targeted operations and do not negate the value of gold as a reserve asset, but rather are expedient measures to deal with sudden geopolitical and economic pressures .
Turkey's central bank has sold off a significant portion of its gold reserves to defend the currency amid sharp depreciation of the lira. Over the past two weeks, more than 118 tons have been sold, bringing reserves down to 702.5 tons. While Poland was once one of the largest buyers, there are proposals to monetize some of its gold reserves for defense spending.
The Russian central bank has been selling gold since 2025 to finance war-related spending, bringing its reserves to a four-year low.
The Turkish central bank's sale is particularly typical, reflecting an urgent need for liquidity amid high oil prices and currency pressures .
Gold prices came under pressure after news of the central bank's sale broke. Gold prices initially rose due to safe-haven demand during the early stages of the US-Iran conflict, but retreated as oil prices pushed up inflation and the dollar strengthened. Gold even entered bear market territory at times, although it remains structurally supported in the long term.
Analysts believe that there is a risk of increased volatility from short-term sell-offs, but this will not reverse the long-term trend of gold as a diversified reserve asset .
Despite some temporary sales, most experts believe central banks are still net buyers overall. A World Gold Council survey shows that 95% of central banks plan to continue increasing their gold reserves in the future, with purchases expected to remain at a high level in 2026 .
Geopolitical tensions, fiscal deficits, and the need for dollar reserve diversification will continue to support gold. In the short term, the US-Iran situation, oil price trends, and Federal Reserve policy will be key variables. If the conflict eases and inflation subsides, gold's attractiveness may rise again.
Global central banks have shifted from record gold purchases to partial sales, primarily driven by the energy crisis and high inflationary pressures stemming from the US-Iran conflict. Emerging market central banks are prioritizing the stabilization of their currencies and domestic economies, selling gold in exchange for liquidity. This shift has exacerbated short-term volatility in gold prices but has not altered its strategic position as a long-term reserve asset. The future trajectory of the gold market will continue to depend on the degree of easing geopolitical risks and adjustments in monetary policy, with structural buying demand expected to provide support.
At 9:39 AM Beijing time, spot gold was trading at $4,845.20 per ounce.
Gold prices face some short-term pressure, and the cash price is still far from the historical high of $5,596.33 reached at the beginning of the year. However, experts believe that this move is an expedient measure to deal with a sudden crisis and has not changed the strategic status of gold as a long-term reserve asset.
Central bank gold purchase record
Global central bank gold purchases have reached unprecedented levels in recent years. From 2022 to 2024, central banks made net purchases of over 1,000 tons of gold annually, far exceeding the average level of the previous decade. Although the pace slowed somewhat in 2025, net purchases still reached 863 tons for the year, remaining at a historically high level.
This wave of buying was primarily driven by emerging market central banks, which are increasing their gold reserves to diversify risk and reduce their reliance on dollar assets . Poland, India, and Turkey are among the major buyers. Data from the World Gold Council shows that central bank gold purchases have become a key structural force supporting the long-term rise in gold prices, with continued buying even as gold prices have repeatedly hit new highs .
Reasons for recent gold sales by some central banks
Entering 2026, some central banks shifted to selling or suspending gold purchases, mainly due to the escalating conflict between the US and Iran and the potential blockade of the Strait of Hormuz. The conflict led to high and volatile oil prices, pushing up global inflation expectations and reducing the scope for interest rate cuts. This high-interest-rate environment diminished the attractiveness of gold, which yields no interest .
Furthermore, emerging markets face pressure on their currencies to depreciate, leading some central banks to sell gold to obtain dollar liquidity and stabilize exchange rates and their domestic financial markets. Following the breakdown of US-Iran negotiations, rising energy prices have further exacerbated inflation concerns, requiring central banks to prioritize short-term economic stability rather than long-term reserve diversification .
Experts point out that such sales are mostly targeted operations and do not negate the value of gold as a reserve asset, but rather are expedient measures to deal with sudden geopolitical and economic pressures .
Typical Country Case Analysis
Turkey's central bank has sold off a significant portion of its gold reserves to defend the currency amid sharp depreciation of the lira. Over the past two weeks, more than 118 tons have been sold, bringing reserves down to 702.5 tons. While Poland was once one of the largest buyers, there are proposals to monetize some of its gold reserves for defense spending.
The Russian central bank has been selling gold since 2025 to finance war-related spending, bringing its reserves to a four-year low.
The Turkish central bank's sale is particularly typical, reflecting an urgent need for liquidity amid high oil prices and currency pressures .
Impact on gold prices and markets
Gold prices came under pressure after news of the central bank's sale broke. Gold prices initially rose due to safe-haven demand during the early stages of the US-Iran conflict, but retreated as oil prices pushed up inflation and the dollar strengthened. Gold even entered bear market territory at times, although it remains structurally supported in the long term.
Analysts believe that there is a risk of increased volatility from short-term sell-offs, but this will not reverse the long-term trend of gold as a diversified reserve asset .
Long-term trends and prospects
Despite some temporary sales, most experts believe central banks are still net buyers overall. A World Gold Council survey shows that 95% of central banks plan to continue increasing their gold reserves in the future, with purchases expected to remain at a high level in 2026 .
Geopolitical tensions, fiscal deficits, and the need for dollar reserve diversification will continue to support gold. In the short term, the US-Iran situation, oil price trends, and Federal Reserve policy will be key variables. If the conflict eases and inflation subsides, gold's attractiveness may rise again.
Editor's Summary
Global central banks have shifted from record gold purchases to partial sales, primarily driven by the energy crisis and high inflationary pressures stemming from the US-Iran conflict. Emerging market central banks are prioritizing the stabilization of their currencies and domestic economies, selling gold in exchange for liquidity. This shift has exacerbated short-term volatility in gold prices but has not altered its strategic position as a long-term reserve asset. The future trajectory of the gold market will continue to depend on the degree of easing geopolitical risks and adjustments in monetary policy, with structural buying demand expected to provide support.
At 9:39 AM Beijing time, spot gold was trading at $4,845.20 per ounce.
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