Some central banks have been selling their gold. That doesn't mean you should too.

By Myra P. Saefong

 Gold's biggest monthly price decline in nearly 13 years proves its value for investors 

 "Gold is the asset that held its value well enough to be worth liquidating," says Jan Skoyles of GoldCore. 

 Gold suffered its biggest monthly drop in nearly 13 years and some central banks have shifted from being buyers to sellers - but that actually proves the precious metal can be more valuable to investors than it's ever been. 

 "The narrative that central banks have abandoned gold is just not supported by the data," said Jan Skoyles, the U.K.-based head of marketing at precious-metals dealer GoldCore. The data, instead, show a "crisis-driven liquidation by a handful of countries under severe currency pressure. It is not a structural shift away from gold reserves." 

 'Gold is the asset that held its value well enough to be worth liquidating. That is not a weakness in gold. That is the entire point of gold.'Jan Skoyles, GoldCore 

 "Gold is the asset that held its value well enough to be worth liquidating," Skoyles said in a YouTube video posted on April 2. "That is not a weakness in gold. That is the entire point of gold." 

 Central-bank gold buying was one of the strongest "pillars" underneath gold's bull market, Skoyles noted. It was a big part of the reason why gold prices began a relatively steady climb in 2022 to repeatedly reach fresh record highs. Gold futures (GC00), based on the most active Comex contracts, reached their latest all-time on Jan. 29 of this year, trading as high as $5,626.80 an ounce. 

 Central banks purchased over 1,000 metric tons of gold each year in 2022, 2023 and 2024 - roughly double the average over the preceding decade, according to the World Gold Council. Buying slowed a bit in 2025, but remained high at 863 metric tons that year. 

 Central-bank gold buying was consistent and structural, and showed relentless demand, said Skoyles. The start of current war in the Middle East, with the U.S. and Israel launching military attacks on Iran on Feb. 28, seemed to change all that. 

 The most active gold futures lost nearly 11% in March, marking their worst monthly percentage loss since the month ending June 2013, according to Dow Jones Market Data. Gold for June delivery (GCM26) settled at $4,679.70 on April 2 - down $947.10, or almost 17%, from the intraday record high in January. 

 So gold hasn't been the best place for investors to park their money against a backdrop of a war that has fueled a rally in oil prices (CL00) (CL.1) (BRN00), worries about inflation and uncertainty in the global economy. 

 Read: Gold isn't your safe haven in this war: It just logged its biggest weekly drop in over 14 years 

 Instead, the precious metal has offered something that may be even better - a source of liquidity. 

 "When oil spikes, every energy-importing economy on earth suddenly needs more dollars to pay for it. Europe, Turkey, Japan, India - they're all scrambling for dollar liquidity at the same time," Skoyles said. 

 The euro (EURUSD) is down 7% against the dollar since the conflict started, she noted, while the Turkish lira (USDTRY) has hit fresh record lows 11 times since late February. So when your currency is collapsing and you need dollars now, "you sell the most liquid, nondollar reserve asset you have. You sell your gold," said Skoyles. 

 "It isn't because you've lost faith in gold. [It's] because you just need the cash," she added. 

 Central-bank selling 

 Edmund Moy, a former director of the Treasury Department's U.S. Mint, said he'd caution against drawing any long-term trend from central-bank sales because each one has different reasons to sell. 

 Also, there are only a few central banks that have either sold some of their gold or intend to do so in the near term, said Moy, who's also a senior IRA strategist for precious-metals distributor U.S. Money Reserve. "This is not unusual and, overall, central banks have been and will continue to be net buyers of gold." 

 In February, the latest data available showed that global central banks bought 19 metric tons of gold, with Poland buying 20 metric tons, while Turkey and Russia were among the sellers, according to the World Gold Council. That compares to average monthly purchases of 26 metric tons in 2025. 

 The People's Bank of China, arguably the single most important driver of the central-bank buying trend since 2022, appears to have officially paused its gold purchases, said GoldCore's Skoyles. 

 However, information from China is often veiled in secrecy. It is worth keeping in mind that Chinese authorities have been known to understate their actual accumulation, Skoyles noted. 

 Elsewhere, Turkey has drawn down about 60 metric tons from its reserves since the conflict began - about $8 billion worth of gold - to defend the lira, she said. "It wasn't Turkey deciding that gold is overvalued; this was emergency currency defense." 

 Over in Poland, the country's central bank has proposed monetizing its roughly 550-metric-ton gold reserve to generate 48 billion zloty (USDPLN), or about $13 billion, for defense spending, Skoyles said. 

 It's just a proposal, but it caught the gold market's attention because Poland has been the largest central-bank buyer of gold for the last two years, adding over 100 metric tons annually. So when Poland even talks about selling, the market "starts to wonder what's going on," said Skoyles. 

 Russia, meanwhile, has been liquidating its gold reserves since 2025 for its own reasons - primarily to fund its ongoing war with Ukraine - raising about $2.4 billion, with its holdings now at a 40-year low. This is about "war financing," not about "portfolio repositioning," according to Skoyles. 

 So, under a financial pressure, a handful of central banks including Turkey, Poland and Russia sold gold in the first quarter of this year, said Stefan Gleason, president and CEO at Money Metals Exchange. 

 "For them, gold did its job and served as a good source of immediate liquidity," he told MarketWatch. 

 Buying the dip 

 Despite what has appeared to be some weakness in gold, it's hard to ignore the precious metal's achievements in the past few years, which helps strengthen the argument that its price can continue to climb over the long term. 

 Gold has made a "pretty dramatic transformation over the last five years from fringe diversification to core asset in the eyes of [high-net-worth] individuals and even institutional investors," said Peter Grant, vice president and senior metals strategist at Zaner Metals. 

 "If it's good enough for central banks' reserves, it's good enough for everyone," he told MarketWatch. 

 Read: Gold's bull run faces hurdles but finish line is not necessarily in view, according to UBS strategist 

 And the major driving forces behind the rally that gold has seen over the last few years remain in place: "global debt explosion, currency devaluation, de-dollarization, central-bank buying, broad geopolitical instability, mounting domestic political tensions [and] policy uncertainty," said Grant. 

 Private investors seem to agree. They have "seized on gold's price drop, because this sudden retreat gives buyers the chance to reset the clock back before January's historic price spike," said Adrian Ash, director of research at BullionVault. Investing sentiment in gold has previously been stronger only at the peak of the 2008-09 financial crisis and then during the COVID pandemic, he noted. 

 Gold investor sentiment climbed as prices, based on the London Bullion Market Association's benchmark prices for the metal, fell in March. 

 BullionVault's Gold Investor Index, which tracks the number of buyers versus sellers on the digital precious-metals marketplace, rose to 60.7 in March, up 2.3 points from a month earlier to reach its highest reading since August 2020. That means demand for gold among investors actually climbed even as prices fell. 

 "The breadth of demand says that gold remains a compelling investment in today's uncertain and increasingly dangerous world," said Ash. 

 -Myra P. Saefong 

 This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. 

(END) Dow Jones Newswires

04-04-26 0900ET

Copyright © 2026 Dow Jones & Company, Inc.