The ebb and flow of central bank gold: China acquires 5 tonnes while Turkey converts 118 tonnes into currency in March

Central Banks Continue to Influence Gold Markets

Gold remains a crucial asset for central banks, with its value holding steady at important support levels. China, in particular, continues to be a leading force in gold acquisitions.

Recent figures from the People’s Bank of China reveal a purchase of 5 tonnes of gold in the past month. Krishan Gopaul, Senior Analyst for EMEA at the World Gold Council, noted on social media that this marks China’s largest gold acquisition since February 2025.

China’s Gold Buying Streak

China has now increased its gold reserves for 17 consecutive months, bringing its total holdings to 2,313 tonnes.

Experts anticipate that China will persist in expanding its gold reserves, aiming to enhance the yuan’s strength and position it as a contender for global reserve currency status, despite ongoing market fluctuations.

Gold Price Movements and Central Bank Strategies

Last month, gold prices experienced a significant drop of 11.5%, the steepest monthly decline recently. Analysts point out that central banks typically do not react directly to price changes, but they may take advantage of price corrections to increase their holdings.

While China remains steadfast in its gold purchases, the sovereign gold market has become more unpredictable. Some analysts suggest that central banks are monetizing their gold assets to help stabilize their economies, especially in light of the ongoing conflict with Iran.

Turkey’s Gold Reserve Adjustments

Turkey’s central bank has been notably open about its gold reserves. Recent data shows a decrease of 69.1 tonnes in its gold holdings, with the total reduction last month exceeding 118 tonnes.

This represents Turkey’s largest gold reserve drawdown since 2013, according to reports.

The central bank explained that while some gold was sold, most was monetized through swap deals. The resulting liquidity was used to purchase lira and other foreign currencies, supporting the national economy.

Global Economic Impact

Ongoing conflict in the Middle East is affecting worldwide economic activity. Disruptions in supply chains, especially within the energy sector, are contributing to rising inflation pressures across the globe.