Central Banks Add 41 Tonnes to Gold Reserves in May

Poland Nears Reserve Target

Central banks accumulated a net 41 tonnes of gold in May, resuming steady purchases after a brief lull earlier in the year, according to data from the World Gold Council. Poland led the buying with 18 tonnes, bringing its total reserves to 614 tonnes and edging closer to its stated goal of 700 tonnes. The country has now added 64 tonnes year-to-date despite earlier statements about potential sales to fund defense spending.

China's central bank purchased 10 tonnes, marking its 20th consecutive month of net buying and the largest single-month addition in 17 months. The People's Bank of China now holds approximately 2,331 tonnes, representing 9 per cent of its total reserves. Year-to-date, Beijing has accumulated 25 tonnes.

Uzbekistan added 9 tonnes and Kazakhstan 7 tonnes in May. Both Central Asian nations have been consistent accumulators this year, with Uzbekistan adding 33 tonnes and Kazakhstan 20 tonnes since January.

Singapore Returns to Market

Singapore re-entered the buyer list with 4 tonnes, its first net purchase since September 2025. The Monetary Authority of Singapore now holds 197 tonnes. The city-state plans to launch central bank gold vaulting services in October 2026 as part of its broader strategy to establish itself as a regional gold hub.

The Czech National Bank continued its 39-month buying streak with 2 tonnes, while Jordan's central bank added 1 tonne.

Turkey and Russia Extend Sales

Turkey sold 3 tonnes and Russia 6 tonnes in May, extending selling patterns that began after the Iran conflict erupted on February 28. Year-to-date, Ankara has offloaded 81 tonnes and Moscow 34 tonnes.

Turkey's sales are driven by foreign exchange operations to support the lira and gold-for-currency swap arrangements that provide immediate liquidity. The transactions represent tactical balance-of-payments management rather than a strategic shift away from gold holdings.

Russia's drawdown reflects budget pressures from elevated military spending and efforts to convert reserves into alternative currencies, particularly the Chinese yuan. The sales help Moscow manage domestic expenditure while working around international sanctions that limit access to dollar-denominated assets.

Buying Pattern Holds Steady

With the exception of March, central banks have maintained net positive gold purchases throughout the year. This sustained demand contributed to gold's rally from January 2024 through late January 2026, when prices peaked at 5,608 dollars per ounce. Since then, the metal has retreated sharply, trading at 4,165 dollars per ounce on Friday evening in Asian markets, down 25 per cent from the peak and 3.5 per cent for the year.

The pullback reflects a stronger dollar, rising bond yields, and market expectations that the US Federal Reserve may raise interest rates to counter inflation. Concerns about slowing global economic growth have also weighed on the metal, which traditionally benefits from uncertainty but suffers when opportunity costs rise.

Asia's Reserve Strategy

The buying pattern underscores Asia's continued appetite for gold as a reserve asset. China, Uzbekistan, Kazakhstan and Singapore together accounted for 30 tonnes of the 41-tonne global net purchase in May. For Beijing, gold diversification reduces dependence on dollar-denominated assets and aligns with broader efforts to internationalise the yuan.

Poland's steady accumulation, despite earlier talk of potential sales, signals that European central banks also view gold as a stabilising reserve component amid geopolitical volatility. Warsaw's approach contrasts with Ankara's and Moscow's, where immediate fiscal and currency pressures override longer-term reserve strategy.

Central bank demand remains a structural support for gold markets, even as investor sentiment shifts with interest rate expectations and macroeconomic conditions. The divergence between buyers in Central Europe and Asia and sellers in Turkey and Russia reflects differing policy priorities rather than a unified view on the metal's role in reserves.