The main factor behind the current decline is not a loss of confidence in the king of precious metals, but an acute need for cash in emerging economies. Adrian Ash from BullionVault described this phenomenon aptly: “You bought gold for a crisis. Now the crisis has come.” Gold has thus turned into a liquid treasury in the hands of central banks, which states open to finance defense, cover rising energy prices, or protect their weakening currencies. This trend is most visible precisely in countries that are under the greatest geopolitical and economic pressure. Shaokai Fan from the World Gold Council emphasizes that the ability of banks to sell gold precisely in times of stress confirms its true value – it is an asset that is highly liquid and can be immediately monetized when other sources fail.
The Turkish scenario and the fight for stability in emerging markets
The most significant seller this year so far is Turkey, whose official gold reserves fell by a massive 131 tons in March alone. The Turkish central bank used both direct sales and swaps, with a single goal – to stabilize the lira, which has weakened against the dollar by almost 1.7 percent since the beginning of the conflict with Iran.* Russia is reacting similarly by reducing its reserves to finance budget deficits, as is Ghana, which is seeking foreign exchange liquidity. Even Poland, which was the largest buyer of gold in the previous two years, has begun to consider monetizing part of its reserves as part of defense spending. For countries dependent on oil imports, whose prices burden their balance of payments, gold has once again become a very effective risk management tool.
A hawkish Fed and bond yields
In addition to sell-offs by central banks, this precious metal is also facing relentless macroeconomic factors in the USA. The hawkish stance of the US Fed and rising yields on US government bonds are creating an environment in which gold, as a non-interest-bearing asset, is losing part of its attractiveness. Data from Natixis indicate that while in the years 2022 to 2024 central banks were buying a record one thousand tons per year, in 2025 this demand fell to 863 tons due to record volatility.
Searching for opportunity
Despite the current correction, however, there is no reason for panic, but rather for strategic vigilance. The current correction may only be an interesting buying opportunity at a more favorable price, especially considering that in the outlook for 2026 further growth in the price of gold is expected even in the second half of the year. [1] The current situation teaches us that this yellow metal is not only a safe haven and a static asset, but an active tool of monetary and defense policy. In conclusion, it is important to highlight the fact that gold is currently not being sold by a market that does not believe in it, but by a market that needs it to manage the increasing risks arising from geopolitics.
*Past performance is not a guarantee of future results
[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not a guarantee of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied in any forward-looking statements.
