Uganda's central bank will start its domestic gold purchasing programme this month, it said on Monday, joining other policymakers around the world building up their gold holdings after a surge in the metal's price.

The East African nation announced the plan two years ago, saying it would help to boost reserves and cushion the economy from risks in international financial markets.

"If all goes as planned, we should be able to purchase at least 100 kg of gold between March and June 2026," Adam Mugume, executive director for research and economic analysis at the bank, told Reuters.

"We are finalising with gold refineries that have been contracted to carry out fire assaying and refining of gold to purity levels required."

GOLD IN DEMAND

Spot gold jumped more than 2% on Monday to $5,395.99 an ounce, as concerns about the impact of U.S.-Israel strikes on Iran drove a rush into safer assets. Mugume did not say whether or how the price move would impact the plan.

Bullion has hit record highs this year amid heightened global political and economic uncertainties.

Central bankers in Kenya and the Democratic Republic of Congo have also announced moves to diversify their reserves by buying gold.

Uganda exported $5.8 billion worth of gold last year, a 76% increase from 2024, but small-scale wildcat miners still dominate domestic production.

The country commissioned its first large-scale gold mine last year. The Chinese-owned facility is projected to process 5,000 metric tons of gold ore per day and produce about 1.2 tons of refined gold a year.

The central bank will purchase from artisanal miners as well as medium-scale and large-scale producers, Mugume said.

Uganda set up its first bullion processor, Africa Gold Refinery, in 2017, and several others have since been established, processing both locally produced gold and shipments from neighbouring Democratic Republic of Congo.