The Central Bank of the Republic of Turkey (CBRT) was the largest buyer of gold for national reserves of any nation in the third quarter of 2019, acquiring an additional 71.4 tonnes of gold bullion.

The World Gold Council reported in its regular Gold Demand Trends supplement that Turkey had added the gold between July and September, with 41.8 tonnes coming in August. Turkey now has 385.5 tonnes of gold in its reserves, ranking it 12th in the world for physical gold reserves (discounting IMF and Eurozone holdings).

It is likely that Turkey is moving towards gold to mimic Russia and China and limit the influence the US Dollar has on national reserves. Sanctions are currently imposed by the United States on Russia and Turkey, while trade tariffs apply to China as part of the ongoing trade war. President Trump inflamed matters at the start of October with the following tweet about America’s ability to deliberately damage Turkey’s economy.

Such behaviour has previously led the likes of President Vladimir Putin to accuse the United States of bullying and manipulating the Dollar to pressure countries whose politics or goals don’t align.

Russia themselves have continued their long-running gold acquisition, with another 34.9 tonnes added in Q3 taking them up to 2,241.9 tonnes in reserve. The Russian central bank also reported recently that it has managed to halve its US Dollar holdings – now at 23.6% - by switching to gold, the Euro, and the Yuan for added diversification.

China added a smaller 21.8 tonnes in the same three-month period to reach 2,147.8 tonnes but notably did not buy any physical gold in October – the first month without such a purchase since the People’s Bank restarted gold buying in December last year.

Many smaller nations are also beginning to pursue physical gold reserves, with the UAE continuing to buy (4.9 tonnes added) and the likes of Qatar (3.1 tonnes), Kenya (1.9 tonnes), and Kazakhstan (2.1 tonnes) adapting their reserves.

Not everyone is after physical gold though. Mutual funds bought 258.2 tonnes of gold ETFs between July and September, hitting a new ETF record of 2,855.3 tons.


Regardless of which type of gold investors are after, the lowering of interest rates is helping to remove most if not all of gold’s opportunity costs – costs experienced due to gold’s lack of a yield.

Rate cuts are also indicative of economic fragility. Gold’s demand may have slipped recently due to the potential of a first phase, part deal between the United States and China, but central banks are still keen to diversify with gold, and investors as a whole are increasingly more aware of each round of poor economic figures coming from central banks, financial institutes, and economic analysts.