Central banks buy net 17 tonnes of gold as Poland, China lead

Central banks globally bought a net 17 tonnes of gold in April, reversing March's selling as Poland and China led sovereign reserve accumulation.

Central banks bought a net 17 tonnes of gold in April, the World Gold Council said Wednesday, reversing the prior month's net sales as Poland and China led sovereign reserve accumulation.

"Central banks resumed net gold purchases in April, having bought 17 tonnes. This was a rebound from the sizable net sales reported in March," said Marissa Salim, senior research lead for Asia Pacific at the World Gold Council.

Poland was the top buyer at 14 tonnes, bringing its year-to-date purchases to 45 tonnes and total gold reserves to 595 tonnes, or about 30 percent of total reserves. China added 8 tonnes, its largest monthly purchase since December 2024, extending its buying streak to 18 consecutive months. Official Chinese gold reserves now stand at 2,322 tonnes, or 9 percent of total reserves. The Czech Republic bought 3 tonnes, its 38th consecutive monthly purchase, lifting reserves to 79 tonnes.

The renewed buying comes after the European Central Bank reported that gold has overtaken U.S. Treasury bonds as the world's largest central bank reserve asset, accounting for 27 percent of global reserves versus 22 percent for Treasuries. However, the ECB warned the shift is driven largely by valuation effects from gold's near-doubling over the past two years and may not be sustainable, citing gold's price volatility, lack of income generation and storage costs.

Gold's Rally Fades as Iran Conflict Reshapes Outlook

Gold hit an all-time high of nearly $5,600 per ounce in January before the outbreak of conflict in the Middle East triggered a sharp reversal. Spot gold traded at $4,476 per ounce as of Wednesday, down more than 20 percent from its peak. The energy shock from the Iran conflict pushed crude oil above $100 a barrel, stoking inflation fears that have historically weighed on gold. Investors rotated into the oil complex, while expectations that new Federal Reserve Chair Warsh may pursue a hawkish policy mix of balance sheet reduction before rate cuts further pressured dollar-denominated gold.

Wall Street banks have diverged on the outlook. Morgan Stanley cut its second-half 2026 target to $5,200 per ounce, citing rising real interest rates. JPMorgan repriced its 2026 average forecast to $5,243, pointing to persistently low futures open interest. Citigroup is bearish in the near term, predicting $4,300 within three months, while maintaining a $5,000 medium-term target. Goldman Sachs remains bullish with a $5,400 year-end 2026 target, and Wells Fargo has projected $8,000 per ounce by 2027 on a currency depreciation thesis.

The divergence in forecasts reflects uncertainty about gold's dual role as both a safe haven and an inflation-sensitive asset. The Iran conflict has upended the traditional relationship where gold rises on geopolitical turmoil — this time, the energy-driven inflation shock and hawkish Fed expectations have broken that correlation, at least temporarily.

Sellers Emerge Among Buyers

Not all central banks joined the buying. Russia sold 6 tonnes in April, extending its year-to-date sales to 22 tonnes. Turkey, which sold about 80 tonnes this year to defend its currency, reported flat reserves in April after short-term gold-dollar swaps matured. Uzbekistan sold 1 tonne in April but remains a net buyer year-to-date at 24 tonnes, second only to Poland. Kazakhstan and Azerbaijan also sold gold during the period.

The divergence highlights a growing split among sovereign reserve managers. Eastern European and Asian central banks have dominated purchases, averaging 12 tonnes and 11 tonnes per month respectively over the past 36 months, according to the WGC. Global central bank net purchases averaged 29 tonnes per month over the same period.

Looking ahead, the WGC's ninth Central Bank Gold Reserves Survey, due for release in June, will provide the latest insights into sovereign buying intentions. In last year's survey, 95 percent of respondents expected global central bank gold reserves to increase over the following 12 months, up from 81 percent in the 2024 survey. If buying intentions remain strong, central bank demand could provide a floor for gold prices even as short-term headwinds persist.

This article is for informational purposes only and does not constitute investment advice.