05.06.202311:01 Forex Analysis & Reviews: Turkey's sell-offs pulled down central bank gold holdings

Various central banks saw a sharp drop in gold reserves in April, primarily due to Turkey selling over 80 tons of gold. Prior to this, central bank gold holdings already declined by one ton in March 2022. However, Krishna Gopala, Senior Analyst at WGC, said the monthly decrease does not confirm a change in trend.

Following the sale of around 15 tons in March, the Central Bank of Turkey sold another 81 tons in April, reducing its gold reserves to 491 tons. The region held the title of the largest purchaser of gold last year, after it acquired 148 tons and increased its gold reserves to 542 tons.

Reportedly, a temporary partial ban on gold bar imports forced Turkey to sell a portion of its reserves in the domestic market to meet very high demand.

Meanwhile, gold sales by other countries became significantly lower. The National Bank of Kazakhstan sold 13 tons, the Central Bank of Uzbekistan sold two tons, and the National Bank of the Kyrgyz Republic sold 0.6 tons.

Although massive gold sales have little chance of becoming a new trend, central bank gold purchases started to slow down. In April, only four central banks bought gold. Poland purchased 15 tons, China bought eight tons, the Czech Republic bought two tons, and Mongolia purchased one ton.

Despite the decline in gold reserves in April, the WGC believes that banks will continue to increase their gold reserves throughout 2023.