In the past few weeks and months we have seen some reports wherein it became clear Germany is actually selling some of its gold on a monthly basis. That’s an interesting phenomenon as it’s weird to see a country secretly repatriating its gold which it starts to sell shortly afterwards.

There’s no doubt it must have been easier to start selling when it was still located in the foreign vaults, and just transfer the cash proceeds back to Berlin or the Bundesbank. But okay, the sales are pretty marginal as Germany ‘dumped’ just 120,000 ounces of gold in the past three months. A move from 108.6 million ounces to 108.48 million ounces isn’t the end of the world, and definitely doesn’t indicate the start of a trend.

But what did catch our attention (besides obviously the ‘Russian Alliance’ –consisting of Russia, Belarus and Kazakhstan – buying more gold), was the behavior of Turkey. Not only are the Turks buying more gold at a substantially more aggressive pace than the Russians adding 950,000 ounces of the yellow metal in just three months, the purchases are also much more meaningful when you look at the bigger picture.

In just three months, Turkey has increased its gold reserves by in excess of 7% and that’s a really substantial step for a relatively small country. What makes it even more interesting is the fact Turkey was a huge net seller in 2016 as it sold in excess of 3 million ounces of gold between June and December before increasing its position again (at a rather aggressive pace).

There’s no real explanation for this, and we would be surprised if the Turkish Central Bank was trying to ‘time the market’ as this wouldn’t explain the substantial sales when the gold price lost its momentum in the second half of last year.

As you can see on the previous image, the average weight of the precious metal in the total basket of foreign reserves has also been increasing from January until May (we are still waiting for Turkey to release its June update) has continued to increase in the first few months of the year.