Global Central Bank Gold Reserves Decline Due to Turkey’s Record-Selling – World Gold Council Report

Investing.com – Holdings of global central banks declined for the first time in more than a year, according to a report by the World Gold Council. This is due to Turkey selling 80 tons of gold, bringing gold holdings down to 491 tons. The highest number recorded by the Turkish gold reserves is 542 tons.

The decline in the gold reserves of the Central Bank of Turkey is the first of its kind since March 2022.

“The monthly decline is not a reversal,” says Krishan Gopaul, senior analyst at the World Gold Council. “Friday’s data shows that the decline was mainly due to Turkey, and not to a wave of selling from other central banks.”

The report indicates the reasons for the decline are limited to:

• Local dynamics, not a change in the long-term gold policy

• Gold was sold in the local market to meet the very strong demand for bars, coins and jewellery.

The World Gold Council is following the situation in Turkey to see if the selling will continue.

The Central Bank of Kazakhstan also sold 13 tons of gold, the Central Bank of Uzbekistan 2 tons, and Kyrgyzstan 0.6 tons.

The report also indicates a slowdown in purchases. In the month of April, only 4 central banks bought gold, and the banks are:

• Polish central by 15 tons

• People’s Bank of China 8 tons (continuing the purchase chain for the sixth consecutive month)

• The Central Bank of the Czech Republic by 2 tons

• The Central Bank of Mongolia, by tons.

Türkiye and its exceptionalism

Demand for gold is rising strongly in Turkey as a way to hedge against the collapse of the currency, which hit a new record above 21 Turkish liras per dollar on Friday before retreating and closing at 20.96 Turkish liras per dollar.

The trade balance deficit recorded an increase of 18.8% due to the increase in gold imports, and the Central Bank works to sell gold to meet the domestic demand.

Selling gold helps stabilize the Turkish lira, which has risen between 70-85% compared to last year, so selling gold locally reduces its supply in the market, which helps push it to stabilize.