Goldman says central banks to step up gold-buying, aiding prices

[SINGAPORE] Central banks are expected to step up gold-buying, helping prices to recover by year-end, according to Goldman Sachs.

Purchases are expected to pick up to average 60 tonnes a month over 2026, analysts Lina Thomas and Daan Struyven said in a note dated on May 15. Under a revised framework for estimated accumulation, the 12-month moving average of purchases was 50 tonnes in March, up from a prior figure of 29.

For central banks, there’s “strong underlying interest in gold, and recent geopolitical developments are likely to reinforce diversification over time”, the analysts said, citing an in-house survey.

Gold has struggled since the outbreak of the war in the Middle East, as higher energy costs have raised worldwide inflationary pressures, making central banks less likely to ease policy. With no end to the conflict in sight, global bond markets have sold off, putting pressure on non-yielding gold.

Goldman’s assessment of official-sector activity follows an upbeat assessment from the World Gold Council. The group estimated central-bank purchases at 244 tonnes in the first quarter, up from 208 tonnes in the prior three months.

Spot gold traded near US$4,534 an ounce on Monday (May 18), compared with a record just below US$5,600 set in late January. Goldman maintained a bullish target for prices to climb to US$5,400 an ounce by the end of this year, following similar recent calls from UBS and ANZ.

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Still, in the near term, Goldman was cautious. Gold is “a natural source of cash if private investors face liquidity needs – for example, if equity markets sell off amid higher rates and weaker growth expectations”, the analysts said.

Goldman’s methodology for estimating central-bank buying had rested in part on assumptions based on flows seen in UK trade data. It was updated as the figures may “no longer fully reflect” shifts, the analysts said. BLOOMBERG