Global central banks show strong interest in gold, while Turkey opts for reserve sales

The demand for gold by central banks has continued unabated in recent times. Following the clashes in Iran, many countries' central banks have accelerated their gold purchases. According to information provided by the World Gold Council, countries such as China, Poland, the Czech Republic, and Uzbekistan have continued to increase their gold reserves following the operation conducted by the US and Israel against Iran on February 28.

The appeal of gold came to the forefront once again with the outbreak of the war between Russia and Ukraine in 2022. In an assessment by The New York Times, it is predicted that this trend will be long-lasting due to recent developments.

The People's Bank of China has been steadily increasing its gold reserves for seventeen months. According to March data, China purchased approximately 5 tons of gold, marking its largest monthly increase in the last year. Meanwhile, the National Bank of Poland announced that it has increased its gold reserves from 228 tons in 2022 to 580 tons as of March. Bank Governor Adam Glapinski stated that they aim for the reserves to reach 700 tons in the near term.

120-TON SALE BY THE CBRT AFTER THE CONFLICT

The Central Bank of the Republic of Turkey (CBRT) had stood out as one of the world's largest gold buyers, particularly during the 2023-2025 period. However, with the start of the clashes in Iran, the CBRT sold a total of 120 tons of gold to the market or utilized it in swap transactions within three weeks.

CBRT Governor Fatih Karahan stated regarding these transactions, "The goal of all our steps is to support price stability and strengthen financial stability." Analysts suggest that these sales were made to prevent the deterioration of the country's economic outlook and the depreciation of the Turkish Lira. This move by the Central Bank is seen as an indicator that countries can utilize gold as an emergency cash source or a financial buffer during extraordinary developments such as war.

GOLD RETAINS ITS SAFE-HAVEN STATUS

Economic circles emphasize that in environments of crisis and uncertainty, gold continues to play its role as both a store of value and a source of immediate liquidity. Krishan Gopaul from the World Gold Council stated that the demand for gold by central banks further reinforces this image in the markets, noting, "Regardless of the conditions, central banks have become a true pillar of demand in the gold market."

News Source: 12punto