Gold price breaks below the $5000 mark again! Global central banks cool on gold purchases

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Source: China Business News

Reporter: Ciyupeng, Beijing

Wind data shows that on March 17, London gold spot prices fell below $5,000 per ounce again, reaching a low of $4,994 per ounce. Additionally, the World Gold Council’s March report indicates that global central banks’ gold purchasing momentum slowed at the beginning of 2026.

Dollar Strengthening Causes Disruption

London gold spot prices have fallen below $5,000 per ounce for two consecutive days. On March 16, the lowest was $4,966 per ounce, followed by a slight rebound. On March 17, it fell below $5,000 again.

Qü Ruì, Senior Vice President of Research and Development at Orient Securities, told China Business News that on March 16, gold broke below $5,000 per ounce. This was partly due to the ongoing escalation of the US-Iran conflict, with no signs of easing—Iran not only blocked the Strait of Hormuz but also expanded attacks on refineries and other facilities of Gulf allies. Meanwhile, Trump refused to reach an agreement with Iran under existing conditions, and last weekend, US military bombed military targets on Khark Island, a key Iranian oil export hub. This pushed oil prices higher, further boosting global inflation expectations and prompting markets to reassess the monetary policy paths of major central banks.

Qü Ruì noted that especially this week, with the Federal Reserve’s March policy meeting, rising oil prices could reinforce the Fed’s stance to maintain high interest rates, putting pressure on gold prices. On the other hand, last week’s sharp decline in US stock markets raised concerns about liquidity, and the dollar strengthened accordingly, disrupting gold prices.

Additionally, Qü Ruì said that recent gold price volatility requires time for the market to digest. However, if conflicts persist, inflation and economic growth could face more significant shocks, which would increase demand for gold.

Central Bank Gold Purchases Slow Down

It is worth noting that recent central bank gold accumulation has decreased.

The March report from the World Gold Council shows that the pace of global central bank gold purchases slowed at the beginning of 2026. In January, net purchases totaled only 5 tons, less than 20% of the average monthly demand in 2025.

On March 4, the Governor of Poland’s central bank proposed to the president a plan to raise approximately $13 billion by selling part of its gold reserves for national defense spending.

In February, the Russian central bank announced it sold 300,000 ounces of gold in January, reducing its total gold holdings to 74.5 million ounces. This was Russia’s first reduction in gold reserves since October last year.

A banking professional in North China told reporters that central banks’ increased gold holdings are mainly driven by macro considerations such as reserve structure and exchange rate stability, which differ fundamentally from the investment logic of ordinary investors. From the market perspective, after reaching high levels earlier, gold prices are now affected by multiple factors including US interest rate expectations, geopolitical tensions, and actual demand. Increased volatility and market disagreements also make short-term operations more difficult. Ordinary investors should rationally assess their asset allocation and risk tolerance.

(Editor: Zhang Manyou; Review: He Shasha; Proofreading: Zhai Jun)

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