For centuries, gold has been recognized as an investment vehicle that rises during times of uncertainty and stabilizes when the market calms down. This has become its most fundamental identity. However, gold is not merely a reaction to financial fluctuations. It is preferred by people around the world for various reasons, with demand often shaped by countries' socio-cultural dynamics, market conditions and macroeconomic determinants. Recent events have demonstrated that while gold remains a safe haven, it has also transformed into a strategic asset that is actively evaluated in more portfolios.

To understand this transformation, one needs only look to 2025. According to World Gold Council data, gold hit new highs 53 times that year, and these records strengthened demand rather than reducing it. It is generally assumed that buyers will pull back as prices rise. In 2025, however, investor behavior changed, and the rise did not prevent demand from continuing. This picture shows that gold is moving away from being a tool remembered only in times of crisis and is finding its place in portfolios in a more planned and conscious manner.

Two dynamics drive this change: the realignment of the global monetary order and the emergence of geopolitical risks as a more permanent topic of discussion. Discussions about de-dollarization also gain meaning within this framework. The questioning of the dollar's status as a reserve currency and increasing uncertainty in the global system created a backdrop that strengthened investors' search for safe havens. In addition to traditional investors, we must also consider the decision of central banks, particularly China's, to allocate more of their reserves to gold rather than the U.S. dollar in order to ensure macrofinancial stability and secure their countries' payment systems. Policy choices and foreign policy lines that have emerged in the United States in recent years and could have unusual effects on the global economic order are also seen as factors increasing this uncertainty.

Gold offers a concrete advantage here. It can be transported and stored as an asset that is not dependent on the promises of another country and is not subject to the obligations of any institution. Therefore, as gold's safe haven status strengthens, it is taking on a more central role in central bank reserves and financial institutions' portfolio strategies.

According to the World Gold Council's February 2026 assessment, interest in physical gold-backed exchange-traded funds (ETFs) remained very strong in January 2026. Global net inflows reached a record level of $19 billion. Contributed to by the rise in gold prices, total assets under management reached $669 billion. The amount of gold held by ETFs increased by 120 tons to 4,145 tons. While inflows appear widespread regionally, North American and Asian funds stand out. Asia accounts for about half of global net inflows, with demand from China and India particularly noteworthy. In Europe, inflows are also noted to have become more pronounced due to geopolitical and trade tensions.

First shock in 2026

In the first weeks of 2026, sharp movements in gold and other precious metals came to the fore; the increase in the number of players entering the market and the growth in trading volume caused prices to react more sensitively to news flow. At the end of January, gold experienced a sharp decline shortly after a rapid rise, then recovered. Limited volume due to the Lunar New Year holiday in Asia amplified the volatility, while investors buying at the bottom offset part of the decline. This process coincided with days when expectations for appointments related to monetary policy in the U.S. strengthened. However, markets often react not to a single headline, but to the direction of monetary policy, perceptions of institutional independence, interest rate expectations, and overall risk appetite. As gold is a non-interest-bearing asset, these expectations are reflected more directly in pricing.

The emergence of Kevin Warsh, a supply-side economist, as a frontrunner for the U.S. Federal Reserve (Fed) chairpersonship is triggering a downward movement in commodity prices. In addition, the possibility that U.S. President Donald Trump's economic policy preferences could cause market volatility does not eliminate uncertainty. Ongoing discussions about institutions can be counted among the factors that could support commodity prices in the coming period, albeit not very strongly.

Markets are closely monitoring the minutes of the Fed's latest meeting and the messages from officials. In general, the prevailing view is that it would be more appropriate to keep interest rates at current levels for a while until there is clearer evidence that inflation is moving steadily toward the target. On the other hand, if the disinflation process continues, as data support, additional interest rate cuts could be back on the agenda during the year.

Such periods highlight the behavioral differences between large and small investors. On days of increased volatility, large players often sell high and then reposition themselves during pullbacks to create room to maneuver. Small investors, on the other hand, tend to buy near the end of an uptrend and sell when concerned about losses during a downturn, increasing the risk of poor timing. Therefore, the investor's reaction to price movements is as important as the movements themselves in determining outcomes.

What did 2025 change?

The explanation of profit-taking (selling high and buying low) is often a significant part of the reality. Such corrections have become more meaningful, especially after a period of record highs like 2025. However, the real issue is related to gold now being a major component in more portfolios. As gold is increasingly viewed as an active investment vehicle, the impact of shocks on its price becomes more pronounced.

The 2025 data support this framework. Total gold demand exceeding 5,000 tons, market value reaching $555 billion, gold usage in technology remaining stable at around 323 tons, and central bank purchases historically high at 863 tons reinforce the same message. Gold is moving away from being a commodity held solely for protection. It has already taken its place in portfolios as a strategic weight in a period where more complex risks are being discussed.

In Türkiye, the global ounce price is not the only factor determining the price of gold. The USD/TRY exchange rate and local expectations also affect the price simultaneously. Therefore, even if the ounce price falls, if the exchange rate remains strong, the price of gold per gram may decline only slightly. When the rise in the ounce coincides with an increase in the exchange rate, the rise is felt more sharply. This dual effect increases the timing risk, especially for short-term traders, and when global news and exchange rate movements accelerate simultaneously, the volatility increases even more.

Another factor that makes gold important in Türkiye is the country's reserve structure and household savings habits. According to Central Bank of the Republic of Türkiye (CBRT) data, the increase in official gold reserves to over 641 tons and the high level of gross reserves show that gold is monitored not only as an individual savings instrument but also as part of the macro-financial outlook. On the other hand, estimates shared by CBRT Governor Fatih Karahan revealed that households' gold reserves outside of the banking system are quite substantial ($600 billion) and that recent price increases have created a significant wealth effect on these savings. Therefore, gold stands out in Türkiye not only as an investment choice but also as a variable that impacts the economy through balance sheets and confidence channels.

Consequently, interpreting the sharp correction at the beginning of 2026 as the end of gold, or dismissing every pullback as insignificant, is unhealthy. A more realistic approach is to acknowledge that gold moves in tandem with both structural dynamics and short-term market reflexes. Features such as reserve diversification and geopolitical risk premiums strengthen the long-term investment ground. Interest rate expectations, the direction of the dollar, fund positions, and news flow, on the other hand, amplify short-term volatility. The price movements we have seen recently point to a scenario where both of these dimensions are active simultaneously.