A profound structural shift is underway in global reserve portfolios. For the first time since the mid-1990s, gold has overtaken US Treasury securities as the primary asset held by central banks, now comprising 24% of global reserves compared to 21% for US debt. This marks a dramatic reversal from a decade ago, when in the fourth quarter of 2015, gold’s share stood at just 9% against 33% for Treasuries. The aggressive purchasing from emerging economies, driven by a desire for diversification amid geopolitical strains, is the primary force behind this capital migration.
The immediate price action, however, is tethered to a more specific calendar event: the expiry of the US-Iran ceasefire on April 21. The prospect of what follows has propelled gold above $4,800 per ounce. Paradoxically, it is hope for peace, not fear of war, that is providing support. Easing tensions have pushed oil below $90 a barrel, reducing inflationary pressure and, in turn, diminishing expectations for further interest rate hikes—a positive environment for non-yielding gold. Reports suggest former President Trump has signaled a desire to end the conflict, with Bloomberg noting plans for a potential two-week ceasefire extension and Pakistan as a likely venue for further talks.
Despite this diplomatic maneuvering, the market’s optimism may be premature. Negotiations have already failed once, and the underlying situation remains complex. The US maintains its naval blockade on Iranian oil exports, though Iran is considering a temporary halt to shipments to advance talks. Since the onset of this conflict, gold has lost roughly ten percent, pressured by a higher interest rate environment. Nevertheless, the metal’s price remains over 43% higher than its level from one year ago.
On the monetary policy front, there is little room for surprise. The CME Group pegs the probability of the Federal Reserve holding its benchmark rate steady at 3.50-3.75% in April at 99.5%, capping upside potential. The latest inflation data showed the Consumer Price Index rising 3.3% year-over-year in March, the strongest increase since May 2024, largely driven by energy costs following US-Israeli military action against Iran. The International Monetary Fund has concurrently warned of a global recession if supply disruptions persist, lowering its 2026 growth forecast to 3.1%.
Should investors sell immediately? Or is it worth buying Gold?
The institutional appetite for physical metal shows signs of selectivity. Global central bank purchases in January 2026 totaled just five tonnes, far below the 2025 monthly average of 27 tonnes. Geographically, demand is broadening, with Malaysia and South Korea resuming reserve accumulation after a long pause. Uzbekistan was the largest buyer, while the Bank of Russia led sellers with a nine-tonne reduction. China continued its steady acquisitions. This institutional hunger is mirrored in broader capital markets, where gold-backed ETFs have seen net inflows of 25 tonnes since early April.
On the charts, gold is consolidating after a steep rally earlier this year. Currently priced at $4,805.50, the metal is down 3.96% on a monthly basis and trades nearly twelve percent below its 52-week high of $5,450, marked in January. Since the start of the year, it still holds a solid gain of 10.68%. In the futures market, banks have been scaling back their short positions after massive selling in 2026 failed to curb the price advance, a risk reduction move amid heightened volatility.
The all-time high of $5,595 was set on January 29, 2026. Whether gold challenges that level again depends significantly on the outcome of the diplomatic efforts by April 21. Meanwhile, on the supply side, recent drilling results in Queensland, Australia, have revealed exceptionally high gold grades, pointing to potential medium-term strength in global production. The path forward for gold is now shaped by two distinct forces: a long-term strategic reshuffle by the world’s central banks and the short-term fate of a fragile truce in the Middle East.
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