Rain of sales, because gold continues to fall. The cases of Russia and Poland

Why theoro he interrupted his rally and continues to decline? According to an analysis by Financial Timeslo global energy shock and the intensification of war in the Middle East have prompted a growing number of countries, including Russia e Polandto take into consideration sale of gold to support their own currencies or improve your own tax position. And so they central banks they changed the management of gold reserves and they prefer to sell rather than buy.

According to data from World Gold Councillast year, the net purchases of gold by central banks were approximately 860 tonswith a decrease of 20% compared to the previous year. This year, in addition to the Türkiyeamong the well-known sellers is the Russiawhich gave way 15 tons in January and February. Meanwhile, the head of the Polish central bank recently proposed to sell ingots to raise funds for defense, even though the government opposed the plan. The market operators they believe further sales this year could come from oil importing countries affected by energy crisislike theIndiaor from Central Asian nations with significant gold reserves.

He strong decline in gold recorded last month, which belies its traditional status as safe haven asset e hedge against inflationalso reflects four weeks of outflows from gold exchange-traded funds (ETFs). since the start of the war, as some investors rushed to make profits on successful trades as conflict erupted in the Middle East. The metal dropped to approx $4,650 per troy ounce. Meanwhile a growing number of central banks is choosing to repatriate your goldincluding the Francewhich last week said it no longer holds gold in the United States. In this panorama, the exception is People’s Bank of China that he purchased 160.000 once troy in March, its largest purchase recorded in over a year.

The case of Türkiye

The most emblematic case of new trend it’s there anyway Türkiye that he sold or lent 20 billion dollars in gold from the beginning of war in Iranin a fast-paced series of sales of ingots which contributed to the greatest monthly decline in the price of the metal since 2008. According to an analysis by the consultancy firm Metals Focus based on official data, and reported by Financial Timesthe Central Bank of the Republic of Türkiye he sold 52 tons of gold between February 27 and March 27, bringing the net reserves of the Turkish central bank a 440 tonsthe lowest level in more than two years.

In the same period, the central bank also organized approx 79 tons of gold swaps which involve the leasing of gold bars to generate income and increase downward pressure on precious metal prices increasing the supply available on the markets while it was committed to supporting the value of lira.

The reasons and the general decline

The gold sales underline the determination of Türkiye a support the lirasince the currency stability is a central pillar of the country’s more than two-year campaign to curb theinflationcurrently at 31%. According to calculations based on official data from Burumcekci Research and Consultingthe Turkey’s net international reserves decreased by almost half, standing at 46 billion dollars from the beginning of war in Iran. More generally, while the central banks have been an important driver of the Gold’s multi-year rally which pushed prices to a historic high beyond $5,500 an ounce in January, a recent change in their behavior caused the gold prices: last month prices fell by11,5%In the worst month for gold of the last 18 years.