Turkey’s central bank has executed one of its largest gold liquidations in over a decade, with official reserves falling by approximately 118.4 tons over the last two weeks of March. This aggressive move, valued at nearly $20 billion, was triggered by the economic fallout from the escalating Iran-Israel conflict and the subsequent surge in global energy prices.
The sell-off represents roughly 15% of Turkey’s total gold holdings accumulated over the past six years.
1. The Liquidation Breakdown
The drawdown was a mix of outright sales and “gold-for-currency” swaps aimed at injecting immediate liquidity into the Turkish financial system.
| Period | Reserve Decline | Estimated Action |
| Week of March 20 | 49.3 Tons | ~22 tons sold; ~27 tons swapped. |
| Week of March 27 | 69.1 Tons | ~26 tons sold; ~43 tons swapped. |
| Total (2 Weeks) | 118.4 Tons | Largest 2-week drop since 2013. |
2. Strategic Rationale: The “Lira Shield”
The Central Bank of the Republic of Turkey (CBRT) utilized its gold “war chest” to address three critical economic pressures:
- Defending the Lira: The central bank has reportedly sold over $26 billion in foreign currency since the conflict began. Gold monetization provided the necessary firepower to continue supporting the lira as it faced renewed depreciation pressure.
- Energy Import Costs: As a major net importer of energy, Turkey saw its import bill skyrocket as Brent crude topped $110 per barrel due to uncertainty in the Strait of Hormuz.
- Market Liquidity: The sale helped boost domestic liquidity and stabilize demand for foreign exchange among local businesses and banks.
3. Impact on Global Gold Prices
The sudden influx of Turkish gold into the market, combined with a strengthening U.S. dollar, put significant downward pressure on bullion prices this week.
- Price Drop: Spot gold prices fell 3.6% to approximately $4,587 per ounce on April 2, 2026.
- Market Sentiment: Analysts at Kitco News noted that while central banks were net buyers in 2025, Turkey’s “emergency monetization” has introduced a new volatility factor for 2026.
4. Historical Context: Not the First Time
Turkey has a history of using its gold reserves as a strategic buffer during currency crises.
- The 2023 Precedent: Between March and May 2023, the CBRT sold 159 tons of gold to satisfy local demand and narrow a current account deficit.
- The Rebuilding Phase: Following that 2023 sale, Turkey aggressively rebuilt its reserves, reaching a peak of 603 tons by January 2026 before this current liquidation began.
5. Current Reserve Status
Following the 118-ton drawdown, Turkey’s official international-standard gold reserves are estimated to sit at 702.5 tons. Despite the massive sale, Turkey remains among the top 10 global holders of gold reserves.
“The scale of this utilization far exceeded market expectations,” noted a report from LongbridgeAI. “It signals that Turkish authorities are willing to deploy their most liquid and valuable assets to blunt the immediate market fallout from the regional war.”
