Turkey is apparently considering using its gold reserves to stabilize the lira. This could also have an impact on the international gold market.
• Türkiye considers using gold reserves
• US dollar influences gold price development
• Central bank policy as a possible market driver
The Turkish central bank is facing a landmark decision amid massive currency fluctuations and geopolitical tensions in the Middle East. As Bloomberg reports, citing informed sources, the monetary authority in Ankara is currently holding internal discussions about the use of its extensive gold reserves. The aim of these considerations is to defend the Turkish lira against the war-related volatility and to stabilize the domestic currency.
Strategic shift in monetary policy
The planned approach marks an expansion of the central bank’s current range of instruments. According to the report, gold swap transactions against foreign currencies are being discussed in particular, which could be carried out on the London market, among other places. Turkey has considerable gold holdings, the total value of which was estimated at around 135 billion US dollars at the beginning of March 2026. About $30 billion of these reserves are currently stored under the jurisdiction of the London financial center, which would allow quick access for international transactions.
The Iran conflict as a catalyst for the crisis
The urgency of these measures arises from the escalation of the conflict in Iran, which has plunged regional markets into deep uncertainty. While gold is traditionally considered a “safe haven”, the precious metal is under unusual selling pressure in March. A crucial factor here is the classic inverse correlation between the gold price and the US dollar: In times of extreme geopolitical tensions, investors often flee primarily into the US currency, which massively strengthens the dollar index. Since gold is traded globally in dollars, a strong greenback makes the precious metal more expensive for buyers outside the dollar zone, reducing demand and depressing prices. Market observers also attribute the current weakness to central banks starting to liquidate their holdings to meet liquidity needs caused by rising energy costs. Since the start of the armed conflict, the price of gold has fallen significantly and is trading well below its highs from the beginning of the month.
Inflationary pressures and dwindling buffers
The economic situation in the country remains tense. The Turkish inflation rate reached 31.5 percent in February. According to Bloomberg data, the monetary authorities have already spent around 12 billion US dollars in March alone to halt the decline of the lira. However, since pure foreign exchange reserves are not available indefinitely, decision-makers are now focusing on massive gold holdings as the last line of defense.
Outlook for the precious metals market
The potential sales or swaps by one of the world’s most gold-savvy central banks are sending shockwaves through the commodities market. Analysts warn that gold prices could come under further short-term pressure if more national banks follow Turkey’s example to shore up their balance sheets. At the same time, experts also see the current price reductions as a bottoming out, provided diplomatic efforts to end the conflict in the Middle East are effective and the flight into liquidity subsides.
Claudia Stephan, editorial team at finanzen.net
