Kazakhstan, one of the world’s biggest gold buyers, is preparing to sell some holdings as U.S. Treasury yields soar. Bonds now offer returns that bullion cannot: gold itself pays no interest.
The National Bank of Kazakhstan wants gold’s weight in its reserves to reduce from 78% to 75% by year-end. Reserves amounted to 386 tons after the sales were stopped in February 2025.
Foreign exchange reserves in September amounted to $66.4 billion, which makes access to money crucial for the officials.
Kazakhstan has a gold concentration problem
“We haven’t seen levels like this in a long time,” Deputy Governor Aliya Moldabekova said. “This makes the dollar an attractive option, thereby reducing the appeal of gold as an investment asset.”
Kazakhstan is the world’s eighth-largest gold producer, and its central bank can buy all domestic output. That has concentrated its investments.
“With such a share of gold, our holdings are starting to resemble a single-asset portfolio,” Moldabekova said.
Half the planned reduction will involve selling options; physical gold sales will cover the rest. Below $4,000 an ounce, falling valuations could reduce sales.
The bank was the world’s fourth-largest official gold buyer during the first eight months of 2026. Other buyers included Poland, China, and Uzbekistan, according to the World Gold Council.
The official demand for gold increased rapidly when Western nations froze huge Russian funds overseas in early 2022 after their diversification post-global financial crisis.
Gold reached its high in early January of about $5,600 an ounce as it was unsure of what President Trump would implement as policies. In the wake of the US-Iran war that started at the end of February, prices dropped by almost 20%.
The Treasury market is testing Washington, too
The 10-year Treasury yield hit a 24-year high last week; the 30-year yield reached 5.36%, a 19-year high. Treasury Secretary Scott Bessent has tried unusual measures to contain borrowing costs.
On July 31, the U.S. coordinated with Japan to strengthen the yen without Japanese Treasury sales. The New York Fed purchased yen using euros from the Exchange Stabilization Fund. Washington also encouraged Japan to consider FIMA repo loans, exchanging Treasury collateral for dollars.
The yen strengthened from 164 to 155 per dollar. Yet Japan later reported $99 billion spent on intervention from July 30 through August 25 and an $88 billion decline in foreign-securities reserves. That suggests securities sales, although valuations complicate the picture. Japan selling Treasuries could add pressure to American borrowing costs, exactly what Washington had hoped to prevent.
On August 19, the Treasury announced it would at least double long-term securities buybacks for liquidity support. Yields initially eased, then recovered. On September 10, it bought $5.2 billion in long-term debt, financed with short-term borrowing, barely 0.016% of the market. Rates remained elevated.
Meanwhile, technology stocks helped Wall Street shrug off rising oil prices and yields. The Dow and S&P 500 registered their second winning week in three; the Nasdaq posted its fourth consecutive weekly gain.
“Market forecasts indicate that the price of gold will continue to rise,” Aliya said. “Therefore, we would prefer not to plan too far ahead; rather, we would achieve the 75% level and then continue to monitor the situation from there.”
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