BoT suspends gold sale plan as market prices fall

The decision comes as international gold prices begin to ease after a strong rally earlier this year. Spot gold was trading at around $4,555 per ounce on March 31, 2026, according to Trading Economics.

Although this represents an improvement from the $4,426 to $4,430 per ounce recorded on March 24, 2026, as quoted by bullion market trackers, it remains below the level at which the BoT had initially intended to sell part of its reserves. 

The marginal decline follows a surge that saw prices briefly climb past the $5,000 mark, driven by heightened geopolitical tensions and strong safe-haven demand.

BoT Governor Emmanuel Tutuba told The Citizen that the central bank had initially planned to sell part of its gold holdings when prices peaked at around $5,500 per ounce but has since opted to hold back.

“There is a slight drop, and therefore this is not a good time to sell,” he said. “When the market is going down, it is a good time to buy, so we are closely monitoring developments.” 

He noted that while current prices remain significantly higher than the $2,400 to $2,500 per ounce range at which the bank previously accumulated gold, the central bank will wait to see if prices rebound before making any move.

Analysts say the recent dip reflects a shift in global sentiment rather than a fundamental decline in gold’s long-term appeal. A combination of easing geopolitical tensions, persistently high interest rates and investor profit-taking has cooled demand for the precious metal.

Earlier price spikes were largely driven by fears of escalating conflict in the Middle East, which pushed investors towards gold as a safe-haven asset. However, signs of reduced tensions have since tempered that demand, triggering a slight pullback in prices.

At the same time, the global interest rate environment continues to weigh on gold. With major central banks maintaining elevated rates and delaying expected cuts, interest-bearing assets such as bonds are becoming more attractive compared to gold, which offers no yield.

Executive Secretary of the Tanzania Chamber of Mines, Benjamin Mchwampaka, said investment decisions between gold and the US dollar are increasingly shaped by shifting market dynamics. “Several factors influence whether investors put their money in gold or the dollar, but ultimately they look at how the market is trending before making a decision,” he said.

Independent financial analyst Oscar Mkude said gold remains a traditional store of value, typically strengthening when other investment options weaken. “Gold is often treated as a safe-haven asset, and it tends to peak when alternative investments underperform. When the dollar declines, investors usually shift their savings into gold,” he said.

He added that the reverse is also true, noting that a strengthening dollar often triggers a sell-off in gold.

“Currently, the dollar has started to gain strength. Gold does not generate interest, and with the United States raising bond yields, many investors are moving their funds there. However, this could be temporary, as market conditions change quickly,” he said.

Mkude noted that gold has been on a sustained upward trend since early 2025 but is now showing signs of correction as investors lock in profits.

“After reaching its peak, it has started to decline, prompting investors to exit before prices fall further,” he said.

He added that broader uncertainty in global markets is also influencing investor behaviour, with many opting to hold cash to maintain liquidity.

“When more people sell, supply rises in the secondary market, causing prices to drop,” he explained.

Mkude described the Bank of Tanzania’s decision as both timely and prudent.

“The move was initially a strategic effort to promote local gold and reduce reliance on foreign currency. However, with global prices declining, suspending the sale is a rational business decision,” he said.