- Global central banks returned to net buying mode in May, with official gold reserves increasing by a net 41 tons, marking the second-highest level since 2026. This indicates that the short-term price correction has not shaken the long-term allocation intentions of sovereign funds.
- Poland and China continue to lead the sovereign buyer camp, with Poland achieving double-digit net purchases for four consecutive months, while China recorded the largest monthly increase since December 2024.
- Turkey and Russia continued their path of reduction, selling a total of 81 tons and 34 tons respectively this year, mainly influenced by their domestic reserve management and foreign exchange liquidity operations.
Highly Concentrated Sovereign Buyer Structure
Data from the World Gold Council shows that the increase in global official gold reserves in May remained concentrated among a few regular buyers. The Polish central bank increased its holdings by 18 tons in the month, bringing its total purchases this year to 64 tons, with official reserves rising to 614 tons, further approaching the policy target of 700 tons. The Chinese central bank purchased 10 tons of gold in May, achieving its 20th consecutive month of net buying and raising its total official gold reserves to 2,331 tons, accounting for 9% of its total reserve assets. Uzbekistan and Kazakhstan in Central Asia also showed active participation, increasing their holdings by 9 tons and 7 tons respectively, reflecting resource-based economies' continued preference for assets without sovereign credit risk.
New Demand Signals from Asia-Pacific and Latin America
The Monetary Authority of Singapore net purchased 4 tons of gold in May, marking its first return to the buyer's list since September 2025. This aligns with its strategy to establish central bank gold custody services and create a regional gold hub by October 2026. Meanwhile, the Bank of Korea has completed preparations for asset allocation through overseas gold ETFs, a rare move in traditional central bank reserve management, aimed at improving its gold reserve ratio, which is only 3%, by leveraging high liquidity and low holding costs. Central banks in Latin America, such as Chile and Guatemala, have also shown slight increases in holdings this year, suggesting that official sector gold demand is spreading to non-traditional buyers.
Diverse Reasons for Reduction
In the seller's market, the Russian central bank continued to reduce its holdings by 6 tons in May, bringing its total gold holdings down to 2,292 tons. The Turkish central bank had a net sale of 3 tons in the month, with total sales reaching 81 tons this year. Analysts point out that Turkey's frequent portfolio adjustments are mainly driven by domestic financial market stability demands, local currency foreign exchange needs, and specific policy liquidity operations. In contrast, Russia's sales are more related to reserve structure optimization and market liquidity adjustments under geopolitical conditions. The reduction actions of both countries have not reversed the overall trend of net growth in global official reserves.
Long-term Allocation Logic Unaffected by Price Fluctuations
According to the World Gold Council's 2026 central bank gold reserve survey, as many as 89% of surveyed central banks expect global gold reserves to continue increasing over the next 12 months, with 45% expecting their institutions to expand allocations. Even against the backdrop of a sharp drop in gold prices triggered by the outbreak of war in Iran, strategic buying at the central bank level remains solid. Gold's role as a tool for reserve diversification, hedging against foreign exchange asset concentration risk, and addressing geopolitical uncertainties is being reinforced. Although official buying cannot fully offset the pressure on gold prices from U.S. Treasury yields and short-term dollar fluctuations, it still forms the underlying support for medium- to long-term valuation.
