The gold market is losing one of its strongest buyers of the past few years, with Kazakhstan starting to sell gold. (AFP)
[Financial Channel/Comprehensive Report] Since 2022, global central banks have purchased nearly 1,000 tons of gold every year, becoming an important force in pushing up gold prices. However, the U.S.-Iran war triggered a surge in energy prices, and some countries began to sell gold reserves in response to pressure on foreign exchange and energy imports. Now, the Central Bank of Kazakhstan, one of the world's major gold buyers, has also joined the ranks of gold sellers. As U.S. Treasury yields rise to multi-year highs, it has turned to increasing U.S. dollar asset allocation, bringing new variables to the gold market.
According to a report by Bloomberg, the Central Bank of Kazakhstan is turning from one of the world's largest buyers of gold to a seller. The main reason is that U.S. bond yields have risen sharply, making it necessary for the central bank to readjust the structure of its foreign exchange reserves. U.S. 10-year Treasury yields rose to a 24-year high last week, also reducing the appeal of gold, which does not yield interest rates.
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Aliya Moldabekova, deputy governor of the Central Bank of Kazakhstan, said in an interview that the market has not seen such high yield levels for a long time, which makes U.S. dollar assets more attractive and relatively reduces the investment value of gold.
Kazakhstan is the eighth largest gold producer in the world, and its central bank has the right to purchase all gold produced domestically. Since it stopped selling gold in February last year, the central bank's gold reserves have increased to 386 tons, accounting for about 78% of the overall foreign exchange reserves. Mordabekova admitted that such a high proportion of gold has made the central bank's asset allocation become closer and closer to a single asset investment portfolio.
As of the end of September, Kazakhstan's foreign exchange reserves reached US$66.4 billion (approximately NT$2.1 trillion), but the central bank believes that reserve assets must still maintain sufficient liquidity. Therefore, it plans to reduce the proportion of gold by about 3 percentage points by the end of this year, from 78% to 75%, half of which will be achieved through the sale of options and the other half through the sale of physical gold.
However, Moldabekova said that if the price of gold falls below US$4,000 per ounce, the proportion of gold in overall reserves may naturally approach the target due to the price drop.
In fact, since the outbreak of the US-Iran war at the end of February, the price of gold has fallen by about 20%. Blocked energy supply in the Middle East has pushed up inflationary pressures and also driven bond yields higher. In January this year, the international gold price once reached a high of US$5,600 per ounce, but then fell significantly.
In the past few years, central banks of various countries have continued to increase their gold holdings. Especially after Western countries froze Russia's large foreign exchange reserves in 2022, the pace of central bank gold purchases has further accelerated. However, the demand for U.S. dollars brought about by the war has also prompted countries such as Türkiye and Russia to sell some gold this year. Despite this, global central banks as a whole still maintain net purchases of gold, with major buyers including Poland, China and Uzbekistan. According to data from the World Gold Council, Kazakhstan will remain the world's fourth largest gold buyer in the first eight months of 2026.
Regarding the follow-up trend, the Central Bank of Kazakhstan did not rule out the possibility of a rebound in gold prices. Moldabekova pointed out that the market predicts that gold prices still have room to rise, so the central bank prefers to achieve the 75% allocation target first, and then observe market changes, and will not prematurely formulate a longer-term reduction plan.
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