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Spot gold prices in London have been fluctuating around $4,700 per ounce in recent trading sessions as the world’s central banks, once major bullish buyers of the precious metal, begin to adopt differing strategies, adding new layers of uncertainty to the market.
Earlier this year, international gold prices hit a record high of $5,600 per ounce before experiencing a sharp decline and entering a period of increased volatility. As of April 27, the spot gold price was hovering around $4,708 per ounce.
Market support for precious metals comes from central bank demand, according to Xia Yingying, head of the Precious Metals and New Energy Research Group at Nanhua Futures. However, recent trading activity has been influenced by persistent uncertainties stemming from ongoing regional conflicts in the Middle East, inflation concerns linked to high oil prices, expectations surrounding U.S. Federal Reserve monetary policy and leadership changes, along with economic stagflation, recession fears, and financial market risks.
This divergence among central banks has heightened overall market uncertainty.
The Central Bank of Turkey has resumed rebuilding its gold reserves after selling nearly 15% of its holdings in March. Recent data indicates that the bank added 30.7 tons of gold during the week ending April 17, and over the past two weeks, total purchases reached 36.4 tons, bringing its holdings back up to approximately 730 tons. This contrasts with its March activity, when, amid rapid capital outflows and increased demand for foreign currency, the bank sold off 118.4 tons of gold over two weeks, reducing its reserves to about 702.5 tons.
Meanwhile, the State Oil Fund of Azerbaijan, another significant gold purchaser, reduced its gold allocation in its investment portfolio from 38.2% at the end of last year to 35.6%, according to its first-quarter report released on April 23. During the first three months, the fund sold 22.1 tons of gold, lowering its total holdings to 178.1 tons.
Other major buyers are choosing a wait-and-see approach. The Swiss National Bank has decided to maintain its current holdings, with Chairman Martin Schlegel stating at a recent shareholders’ meeting that there are no plans to increase or decrease its gold reserves. The bank holds 1,040 tons of gold, with 70% stored domestically within Switzerland. Gold contributed significantly to its investment profits last year, and maintaining a balanced gold position is deemed sensible for diversification, Schlegel explained.
Long-Term Demand Perspectives
Despite some Middle Eastern countries likely to continue selling gold in the near term to generate cash, exerting downward pressure on prices, long-term investor interest in gold is anticipated to remain robust.
Deng Zhijian, a senior investment strategist at DBS Bank’s China division, told this publication that some Middle Eastern nations are still offloading gold for quick cash, making a rapid return of gold prices to $5,000 per ounce unlikely in the near future.
However, he emphasized that medium- and long-term demand for gold is expected to stay strong. Currently, COMEX gold futures are priced above $4,800 per ounce, with September 2024 contracts already exceeding $5,000 per ounce.
Overall, central banks worldwide are still net buyers of gold. In February, they added a net 19 tons, according to the World Gold Council’s Monthly Central Bank Gold Purchasing report for February 2026. This figure is below the 2025 monthly average of 26 tons but marks an increase from just 5 tons in January.
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