Compared to the one-sided gold purchases by central banks in recent years, the current divergence has indeed increased market uncertainty.
The international gold market has temporarily entered a "dull period."
Recently, the spot price of gold in London has been fluctuating around $4,700 per ounce, lacking the momentum to break through the upper resistance level while also avoiding panic selling pressure.
The global gold "big buyers," who were once unanimously bullish, are now showing rare disagreement. On one hand, the Central Bank of Turkey significantly increased its holdings by 30.7 tons in a single week, rebuilding reserves and unwinding some swap positions. On the other hand, Azerbaijan's State Oil Fund sold over 22 tons of gold in the first quarter, marking its first reduction since 2012. Meanwhile, Swiss National Bank Chairman Martin Schlegel clearly stated at the annual shareholders' meeting that there are no plans to increase or decrease gold reserves.
DBS Bank (China) Senior Investment Strategist analyzed that in the short term, some Middle Eastern countries are still selling gold to raise cash, making it difficult for gold prices to return to $5,000 per ounce soon. From a medium to long-term perspective, investor demand for gold remains strong. Currently, the price for COMEX gold futures far-month contracts remains above $4,800 per ounce, with contracts expiring in September next year quoted above $5,000.
Disagreement Among Buyers
Specifically, the Central Bank of Turkey has begun rebuilding its gold reserves. Latest data shows the bank increased its holdings by 30.7 tons in the week ending April 17th. Combined with the increase from the previous week, the total addition over the past two weeks reached 36.4 tons, bringing its actual gold holdings back to approximately 730 tons and unwinding some "dollar-for-gold" swap positions.
Not long ago, the Turkish central bank initiated a "tactical" sell-off of gold. In March of this year, against the backdrop of accelerated capital outflows and rising foreign currency demand, the bank sold 118.4 tons of gold over two weeks, reducing its total gold reserves to 702.5 tons at one point. More than half of this was conducted through gold-for-foreign-exchange swap transactions, essentially using gold as collateral to obtain US dollar liquidity.
Another major global gold buyer, the State Oil Fund of Azerbaijan (SOFAZ), released its first-quarter report on April 23rd, revealing it had reduced the proportion of gold in its investment portfolio from 38.2% at the end of last year to 35.6%.
In terms of holding volume, the fund sold 22.1 tons of gold in the first quarter, reducing its gold holdings to 178.1 tons.
Some analysts suggest there is no indication yet that SOFAZ will continue large-scale gold sales, and this round of selling is primarily due to constraints from its internal holding rules. According to the fund's investment policy, the upper limit for gold's proportion in the portfolio is 35%, allowing for a fluctuation of up to 4 percentage points. By the end of 2025, driven by continuously rising gold prices, the value of the fund's gold holdings had exceeded 38% of its total assets, approaching the practical upper limit of 39%. In this context, active reduction became a necessary operation to maintain compliant allocation ratios.
However, SOFAZ's shift from 13 consecutive years of "only buying, no selling" to its first reduction has also sparked market discussion and concern about whether a key source of buying pressure is showing signs of loosening.
Apart from increasing and decreasing holdings, another major buyer has chosen a third path: the Swiss National Bank is currently opting to maintain the status quo. Martin Schlegel stated at a recent central bank shareholders' meeting that there are currently no plans to increase or decrease gold holdings.
The Swiss National Bank currently holds 1,040 tons of gold, with 70% stored domestically in Switzerland and 30% overseas. Schlegel also mentioned that gold contributed significantly to profits in its portfolio last year, and holding a certain proportion of gold is reasonable from a diversification perspective.
Has the Gold Rally Stalled?
The differing actions of global central banks and sovereign wealth funds reflect the extremely complex pricing environment in the current gold market.
Since the beginning of the year, after hitting a record high of $5,600 per ounce, international gold prices reversed sharply and have undergone multiple rounds of severe adjustments. As of April 27th, London spot gold was hovering around $4,708 per ounce.
Regarding fund holdings, in the week ending April 24th, the world's largest gold ETF, SPDR, saw its holdings decrease by 3.72 tons to 1,049.2 tons, while the world's largest silver ETF, iShares, saw a reduction of 156.3 tons to 15,154.7 tons. Technically, gold prices have been seesawing within the $4,600 to $4,700 range in the short term, with weak upward momentum and bearish market sentiment.
The market has also noted that compared to the one-sided buying by central banks in past years, the current divergence indeed increases uncertainty. However, from a medium to long-term perspective, the narratives of expanding fiscal deficits, de-dollarization processes, and the weakening credibility of the US dollar persist, indicating that the structural demand for gold allocation remains solid.
Overall, global central banks currently maintain a net buying pattern. The World Gold Council's central bank gold buying monthly report for February 2026 showed that central banks globally were net buyers of 19 tons of gold that month. This was lower than the 2025 reported monthly average of 26 tons but represented an increase from the net purchase of 5 tons in January.
Furthermore, according to a World Gold Council survey, 95% of central banks plan to continue increasing their gold reserves in the future. Gold purchases in 2026 are expected to remain at a high level, projected to be between 800 and 850 tons for the full year, only slightly below the 860 tons purchased in 2025.
The head of Nanhua Futures' Precious Metals and New Energy Research Group recently stated that recent trading in the precious metals market has focused on uncertainties stemming from recurring Middle East geopolitical conflicts, inflation concerns triggered by high oil prices, expectations regarding Federal Reserve monetary policy and the change in Fed Chair, economic stagflation, recession, and financial market risks. Downside support comes from the underlying demand for central bank gold purchases. Given the risk of prolonged high oil prices, stagflation trading could become the next major narrative driving precious metals higher, with subsequent attention on further verification from the impact of economic slowdown on risk assets. However, short-term caution is still warranted regarding price adjustment pressures arising from escalating Middle East tensions.
The DBS strategist also believes that the recent sharp decline in gold, triggered by Middle East geopolitical risks, was partly due to some oil-revenue-dependent countries selling gold to raise cash for fiscal expenditures, while some investors increased holdings of US Treasuries for safety, boosting the US dollar and weighing on gold prices. Nevertheless, medium to long-term factors supporting gold remain intact, including a weaker US dollar outlook over the medium to long term, persistent safe-haven demand, and ongoing de-dollarization of reserves which will continue to underpin central bank gold purchases.
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