- Goldman Sachs expects central bank gold purchases to accelerate to an average of 60 tons/month in 2026, up from a revised 12-month moving average of 50 tons in March (previously estimated at 29 tons).
- Goldman maintained its year-end gold price target of $5,400/oz — echoing recent bullish calls from UBS ($5,600) and ANZ — despite spot gold trading at ~$4,545, well off its late-January record near $5,600.
- The People’s Bank of China added the most gold in over a year in April (260,000 troy ounces), marking 18 consecutive months of additions and matching a streak begun in late 2022.
- Near-term, Goldman cautions gold could face selling pressure as a “source of cash” if equity markets sell off amid higher rates and weaker growth — but calls any dip a medium-term buying opportunity.
What Happened?
Goldman Sachs analysts Lina Thomas and Daan Struyven published a note forecasting that central bank gold demand will average 60 tons per month across 2026 — well above the recently revised 50-ton March moving average (which itself was substantially higher than their prior 29-ton estimate). The upward revision reflects a methodology update acknowledging that UK trade flow data may no longer fully capture global official-sector activity. The World Gold Council separately estimated official purchases at 244 tons in Q1, up from 208 tons in Q4 2025. China’s PBOC was the top buyer in April, adding 260,000 troy ounces — the largest monthly addition in over a year — extending its accumulation streak to 18 consecutive months.
Why It Matters?
Central bank demand has been the primary structural support for gold’s historic run, and Goldman’s revised estimates suggest that support is larger and more consistent than previously understood. The geopolitical logic is straightforward: the Iran war, dollar weaponization concerns, and the broader desire to diversify away from U.S. Treasuries are all reinforcing the “debasement trade” that drove gold from $2,000 to nearly $5,600 in roughly two years. The current pullback to ~$4,545 — driven by the bond selloff making non-yielding gold relatively less attractive — is what Goldman characterizes as a near-term headwind, not a structural reversal. Both Goldman ($5,400) and UBS ($5,600) see year-end prices substantially above current levels.
What’s Next?
Watch for whether the global bond selloff extends and forces institutional liquidation of gold positions to meet margin calls or redemptions — Goldman’s near-term caution centers on exactly this scenario. China’s PBOC buying pace will be the key official-sector indicator: 18 straight months of additions suggests a deliberate strategic reserve diversification rather than opportunistic buying. If Iran war tensions push oil further above $110 and bond yields continue rising, gold’s relationship with real rates will be the critical variable — gold tends to struggle when real rates rise but performs well when inflation expectations outpace nominal yield moves.
Source: Bloomberg
