Global Central Banks Purchase 244 Tons of Gold in Q1, Debunking Price Dumping Rumors

UBS Global Research strategist Joni Teves released an in-depth report on precious metals on May 5th, citing data from the World Gold Council (WGC) showing that global central banks and official institutions net purchased 244 tons of gold in the first quarter of 2026, a 3% increase year-on-year, completely dispelling the market's previous concerns about "central banks being forced to sell." The report considers official gold purchases as a "structural stabilizer" in the market and characterizes recent price pullbacks as a good opportunity to gradually build positions.

The official gold buying spree has not waned, and the buyer camp is quietly changing. Major buyers of the 2022-2025 period such as Turkey, China, and the Singaporean sovereign fund (SOFAZ) have slowed down their purchases recently, but Poland, Uzbekistan, Kazakhstan, Malaysia, and the Czech Republic have taken over and become the top five buyers in the first quarter of 2026. UBS points out that the assets of the broader "other official institutions" continue to expand, with dormant institutions re-entering the market, effectively filling the gap left by some traditional major players.

The rumor of Turkey's "50-ton sale" has been proven false. The decrease in Turkey's central bank's official holdings is a combination of direct sales and gold swap balance sheet operations, not a simple liquidation; Swiss trade data shows that Turkey's net imports of gold from Switzerland, the world's largest precious metal refining hub, have remained relatively stable over the past two years, contradicting the "forced seller" narrative. The slowdown in purchases by the Middle East and North African regions is mainly due to the strong rise in gold prices mechanically increasing the proportion of gold in foreign exchange reserves, and reserve managers need to strike a balance between diversification goals and concentration risk.

In terms of gold prices, as of Beijing time May 7th, 14:20, spot London gold (XAU/USD) quoted at $4,709.70 per ounce, up 0.40% on the day, with a session high of $4,720.95.

Regarding macro correlations, UBS points out that gold's recent negative correlation with U.S. 10-year inflation-protected bonds (TIPS) real interest rates and the U.S. dollar is significantly strengthening, returning to the traditional macro pricing framework; at the same time, gold shows a positive correlation with the stock market and a negative correlation with oil. Speculative positions are currently at a moderate level, with the market lacking the willingness to massively build long positions.

In terms of operational strategy, UBS sets $4,500 as the key psychological support level, believing that any recent downside risks should be seen as an opportunity to gradually build positions. The medium to long-term bullish logic comes from two main lines: first, high energy prices drag on economic growth; second, expectations of future real interest rate compression will provide sustained support for gold prices. UBS states that the probability of gold prices exceeding its base forecast limit is increasing.