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 Maipui Gold seems to be “cooling off.”

Recently, the central banks of Turkey, Russia, and Poland have all stated that they have already sold, or are preparing to sell, their reserve gold. In particular, Turkey’s central bank has reduced holdings by nearly 120 tons in the past two weeks.

Regarding this round of actions by some central banks, most market views believe it has not yet changed the overall gold-buying trend.

A February central bank gold-purchasing monthly report for February released by the World Gold Council on April 2, 2026 shows that central banks in various countries net bought 19 tons of gold that month, below the monthly average of 26 tons reported for 2025, but higher than January’s net purchase of 5 tons. Some analysis even suggests that the recent decline in gold “dug a gold pit,” and that now is a good time to buy gold.

The three countries’ central banks are reducing, or plan to reduce, reserve gold

To respond to energy-supply shortages triggered by the Middle East conflict and pressure from the Turkish lira’s depreciation, Turkey’s gold reserves have fallen sharply by nearly 120 tons over the past two weeks, the largest two-week decline since relevant records began in 2013.

Data released by Turkey’s central bank on the 2nd shows that, for the week ending March 28, the country’s gold reserves decreased by 69.1 tons. In the past two weeks, total reductions reached 118.4 tons, bringing Turkey’s total gold reserves down to 702.5 tons. Of that amount, more than half was completed through gold-for-foreign-currency swap transactions—using gold as collateral to obtain U.S. dollar liquidity, and then redeeming the gold upon maturity.

The essence of swap transactions is “swap gold for foreign exchange, redeem at maturity,” meaning the central bank hands the gold to the counterparty in exchange for an equivalent amount of dollars, while also signing a forward contract to buy back the gold in the future at a slightly higher price. It is a short-term financing behavior, not a permanent clearance of holdings.

Analysts believe that since the outbreak of the Middle East conflict, global energy prices have risen sharply. Turkey’s high dependence on energy imports has sharply increased pressure on foreign-currency payments. At the same time, market risk-avoidance sentiment has risen, and the Turkish lira faces depreciation pressure. Turkey’s central bank has therefore had to increase intervention efforts to support the lira 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 said it is considering raising about $13 billion in funding for defense construction by selling part of its gold reserves.

Russia’s central bank, meanwhile, began selling gold in January of this year. According to World Gold Council statistics, in January 2026, Russia’s central bank sold 9 tons of gold, becoming the largest net seller that month. In February, it continued to be a net seller of 6 tons.

Regarding the recent “selling gold” behavior by central banks in multiple countries, Lin Yan, macro chief analyst at the Guolian Minsheng Securities Research Institute, said that the recent gold-selling by some central banks is more “tactical” rather than “strategic.”

The core reasons are as follows—three aspects.

First is institutional behavior that “follows the trend.” In essence, central banks also play the role of “institutional investors” in gold. Taking Turkey’s central bank as an example: when gold prices are in a period of consolidation and range trading, Turkey’s central bank often sells gold; conversely, when gold prices accelerate upward, Turkey’s central bank also accelerates gold purchases.

Second, the fiscal deficit rises rapidly in the short term, forcing central banks to “passively” sell gold to meet liquidity spending. For example, after Turkey’s fiscal deficit rose rapidly, the central bank may, “reluctantly,” sell gold to obtain dollars. Similarly, after Russia’s fiscal deficit rose rapidly in 2025, Russia’s central bank also began a “passive” reduction of gold holdings to secure financial support for the Russia-Ukraine conflict.

Third is the “offsetting” relationship between central bank gold reserves and foreign exchange reserves. Taking Turkey’s central bank as an example, the transmission pathway of the “seesaw effect” between “foreign exchange reserves” and “gold reserves” is: oil price supply shock → oil price increases → worsening current account imbalance → the lira depreciates faster → the central bank sells gold to increase foreign reserves. With the outbreak of the Iran-U.S. conflict, due to worries that the trade deficit would accelerate widening and cause the lira to depreciate too quickly, Turkey’s central bank sold nearly 60 tons of gold in March.

Many institutions still look bullish on gold’s outlook this year

In fact, over the past four years, central banks of various countries have been key buyers in the gold market. Data from the World Gold Council shows that from 2022 to 2024, global central banks purchased more than 1,000 tons of gold on average per year for three consecutive years—about twice the average annual amount purchased in the prior decade. Even in 2025, when gold prices reached new highs repeatedly, global central bank gold purchases still totaled 863 tons, accounting for about 17.3% of global gold demand that year.

Although some central banks have reduced holdings recently, it has not yet changed the overall gold-purchasing pattern. The World Gold Council’s February central bank gold-purchasing monthly report released on April 2, 2026 shows that central banks in various countries net bought 19 tons of gold that month, below the monthly average of 26 tons reported for 2025, and up from January’s net purchases of 5 tons.

In addition, some central banks’ pace of gold buying has not stopped. Among them, the Czech Republic has posted net purchases for 36 consecutive months. China has also increased holdings for 16 consecutive months; from November 2024 to February 2026, it accumulated 44 tons of gold purchases. Uzbekistan has maintained net purchases for 5 straight months.

Research reports released recently by multiple institutions show that institutions still mainly hold a bullish view on gold. UBS strategist Jonny Travers expects that although gold prices have been volatile recently, gold prices will set new highs this year, viewing the recent pullbacks as buying opportunities. UBS expects the average gold price in 2026 to be $5,000 per ounce, and for 2027 and 2028 to be $4,800 and $4,250, respectively.

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

The three factors supporting this forecast include: very low speculative positioning (currently at the 39th percentile), which, if normalized, would bring upward momentum of about $195 per ounce; the estimate by its economists that the Federal Reserve’s cumulative 50-basis-point rate cuts in 2026 would contribute about $120 per ounce; and continued support from central bank demand. The report expects monthly average buying to rise back to about 60 tons, which would become a key pillar for the medium-term price outlook.

The report also points out that risks are distributed both ways but with some skew. The main near-term downside risk is that if the Strait of Hormuz disruption persists and leads to further adjustments in the stock market, it could cause the liquidation of remaining macro hedging positions, and in the worst-case scenario gold prices might fall to as low as $3,800 per ounce. However, the medium- to long-term upside risks are more significant: if current geopolitical events accelerate the diversification of the private sector’s allocations to gold and undermine market confidence in Western fiscal sustainability, gold prices could rise further on top of the baseline forecast, with potential to hit as high as $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 Iran-U.S. conflict, all of the gains in gold since 2026 have been fully unwound, creating a relatively reasonable entry opportunity.

Barclays says that the trend of central banks significantly increasing gold purchases since 2022 is unlikely to fade, and the Federal Reserve has also failed to achieve its 2% inflation target for four consecutive years, making the likelihood of rate hikes in 2026 low. Risks from geopolitical friction, central banks’ continued purchasing activity, upside inflation pressures brought by oil price shocks, and the conflict’s impact on fiscal conditions will all provide support for gold.