Central banks become net gold sellers after 10-month buying streak
What's the story
For the first time in 10 months, central banks have become net sellers of gold, according to data from the World Gold Council (WGC). The trend was led by Turkey and Russia, which sold a combined total of 66 tons of gold in March. The sales offset purchases by other global banks, according to Marissa Salim, Senior Research Lead, Asia Pacific region of WGC.
Major transactions
Major transactions contributing to overall trend
Turkey sold 60 tons of gold while Russia sold six tons in March. The State Oil Fund of Azerbaijan also reported net sales of 22 tons in the first quarter this year. These major transactions contributed to the overall trend of central banks becoming net sellers during this period.
Market shifts
National Bank of Poland emerges as biggest buyer
Despite the trend of net selling, some central banks continued to buy gold. The National Bank of Poland emerged as the biggest buyer, purchasing 11 tons. This aggressive expansion of its gold reserves has been consistent for over three years now, making it the world's leading central bank gold buyer.
Global activity
China continues gold buying spree
The People's Bank of China continued its gold buying spree for the 17th consecutive month, adding five tons in March. Other notable purchases came from the Central Bank of Uzbekistan (nine tons) and the National Bank of Kazakhstan (six tons). Guatemala and Czech Republic also joined this list with two tons each in March.
Strategic moves
Turkey's strategic approach to gold reserves
Turkey sold part of its gold reserves for foreign exchange and liquidity purposes. So far, the country has sold 79 tons of gold from its reserves. The Central Bank of the Republic of Turkiye also swapped 80 tons of gold to manage liquidity. Experts say unlike other central banks that hold gold as a long-term passive reserve, the Turkish central bank uses it as an active macro-financial buffer.
Financial strategy
Russia's budget deficit cover strategy
Russia sold six tons of gold mainly to cover its budget deficits. Analysts say the move was aimed at injecting liquidity into the economy. This highlights how countries like Turkey and Russia are using their gold reserves strategically, not just as a long-term passive reserve but also as an active macro-financial buffer against economic challenges.