Gold Reserves: Not the Safest Yield-Generating Assets

Conflicting trends are emerging among the world’s central banks. Several countries are rapidly increasing their gold reserves, while others are forced to sell. Geopolitical risks, pressure in the foreign exchange market and deliberate reserve management decisions are driving this process. Hungary's gold reserves lost a lot of value very quickly.

In 2026, emerging economies in particular are dramatically increasing their gold reserves. Poland leads the rankings, having expanded its reserves by more than 20 tons so far this year, according to data compiled by Visual Capitalist and analyzed by the economic portal penzcentrum.hu.

Based on the data, central bank gold purchases in early 2026 are concentrated among a few major players like Poland or Uzbekistan. On the selling side, the concentration is even stronger. Russia and Turkey account for the lion’s share of the decline. This suggests that for some economies, the sales were driven by necessity rather than strategic decision-making.

The picture in our region is mixed. Poland is significantly increasing its reserves, and the Czech Republic is also buying, which points to deliberate accumulation. Bulgaria, however, appears as a seller, indicating a different economic situation. Overall, Central and Eastern Europe is strengthening on the buying side, mainly due to Poland’s actions.

These purchases are not ad hoc decisions, as several countries are following a longer-term strategy in which gold’s role within foreign exchange reserves is growing. The goal is clear: to reduce external exposure and establish a more stable reserve structure. There are clearly identifiable reasons behind central bank demand: reducing dollar dependence, managing sanctions risks, rising geopolitical tensions, and diversifying reserves.

In this environment, gold is not a yield-generating asset, but a safety reserve. It is an asset that can be accessed even in a crisis. On the other hand, several countries are reducing their gold reserves. The reduction in gold reserves is typically not driven by a conscious, long-term strategic shift, but rather by necessity like on the case of the largest sellers, that is, Russia and Turkey. In many cases, the countries involved face fiscal pressures that require readily available funds. In addition, stabilizing the foreign exchange market also plays a role, especially when the national currency comes under significant pressure. In such cases, central banks attempt to obtain liquid foreign currency by selling gold.

The liquidity situation is also a key factor, as gold is among the few reserve assets that can be converted into cash relatively quickly. All of this shows that gold plays a dual role in central bank reserve management. On the one hand, it functions as a safety reserve, providing stability in the long term; on the other hand, it serves as a financial asset that can be mobilized immediately in a crisis.

The Hungarian National Bank has significantly increased its gold reserves in recent years. The stock currently stands at around 110 tons. Based on international developments, the role of gold may change even in the short term. The war in Iran, for example, significantly depleted foreign exchange reserves. Hungary’s foreign exchange reserves fell by more than EUR one billion in March. According to data from the Hungarian National Bank, the significant decline was caused by a sudden drop in the global market price of gold.

The actions of central banks indicate that gold’s importance is growing within the global financial system. Purchases and sales together paint the picture. Gold serves both as a hedge and as a reserve that can be quickly accessed if necessary. According to fund managers, the current movement clearly shows that gold is behaving less and less like a classic safe haven.

Experts say this movement is not a one-off phenomenon, but rather indicates that gold’s behavior has changed. Although it continues to serve a certain protective function, investors are increasingly treating it as a volatile asset. Due to rapid price fluctuations, significant losses can occur in the short term, which was previously less common for this asset. For this reason, experts say the focus should be on conscious portfolio construction, not on overvaluing a single asset.