The central bank of Kazakhstan is shifting from one of the world's largest gold buyers to a seller of gold, as elevated U.S. Treasury yields further underscore the need to rebalance its reserves.
In recent years, central banks around the world snapped up gold in large quantities, driving a significant rally in prices. But that rally has stalled as surging bond yields eroded the appeal of gold, a non-yielding asset. The yield on the U.S. 10-year Treasury note rose last week to its highest level in 24 years.
Aliya Moldabekova, deputy governor of the central bank of Kazakhstan, said in an interview: "We haven't seen such yield levels for a very long time. This makes the dollar an attractive option and reduces gold's appeal as an investment asset." She added that the central bank aims to cut gold's share of total foreign exchange reserves by about 3 percentage points by the end of this year.
For years, central banks steadily increased their gold holdings. But after the Iran war broke out, countries around the world rushed to obtain dollars because of rising energy prices, shattering the market assumption that central banks would only buy gold in one direction. Turkey and Russia were among the countries that trimmed some gold holdings earlier this year. Still, according to World Gold Council (WGC) data, central banks globally continued to add to gold overall this year, led by Poland and Uzbekistan.
Kazakhstan is the world's eighth-largest gold producer, and its central bank has the right to purchase all gold produced domestically. Moldabekova said that since the central bank stopped selling gold in February last year, its gold holdings have grown to 386 tonnes. That means gold accounts for about 78% of its total reserves, a ratio she described as uncomfortably high.
Moldabekova said: "With gold accounting for such a share, our reserves start to look like a single-asset portfolio." According to Moldabekova, the central bank of Kazakhstan now plans to reduce gold's share to 75% by the end of this year. Half of the reduction will be achieved through selling options, and the other half through selling physical gold. She added, however, that if gold prices fall below $4,000 per ounce, gold's share could automatically decline toward the target level.
According to World Gold Council data, the central bank of Kazakhstan was the world's fourth-largest gold buyer in the first eight months of 2026. After achieving its initial target, the central bank will continue to observe the situation.
Moldabekova said: "Market forecasts suggest gold prices will continue to rise. Therefore, we don't want to plan too far ahead, but rather achieve the 75% target first and then continue to observe the situation."
As of 3:12 p.m. London time, gold prices edged lower to $4,172.35 per ounce. Since June, gold prices have stabilized, trading mostly within a narrow range of $4,000 to $4,300, but Moldabekova still believes there is upward pressure on gold prices.
Moldabekova said: "Given that there is still a lot of uncertainty, we expect gold prices to still rise modestly."
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