Despite market volatility in October, global central banks continued their robust gold purchases, providing solid support for gold prices, while emerging "tokenized gold" has yet to become a major market driver.
According to Goldman Sachs' latest report on December 12, its "nowcast" model estimates that central banks globally net purchased 49 tons of gold in October. This figure far exceeds the pre-2022 monthly average of 17 tons, reflecting strong and sustained official sector demand.
Notably, Qatar purchased 20 tons and China bought 15 tons in October. Goldman Sachs analysts Lina Thomas and Daan Struyven noted that central banks' steady buying amid high gold price volatility suggests their decisions are driven by long-term strategic considerations—such as hedging geopolitical and financial risks—rather than short-term price sensitivity.
Given this strong official demand, coupled with expectations of future Federal Reserve policy easing, Goldman Sachs maintains its bullish gold price forecast, projecting a rise to $4,900 per ounce by the end of 2026. The bank also highlighted that growing private investor demand could serve as another key upside catalyst.
**Central Bank Buying: A "Multi-Year Trend" for Risk Hedging** Goldman Sachs emphasized that it continues to view central banks' large-scale gold accumulation as a "multi-year trend." The report shows that October's net purchases of 49 tons, along with the 12-month moving average of 66 tons, significantly exceed the pre-2022 monthly average of 17 tons.
The analysts attribute this trend to central banks actively diversifying reserve assets to hedge against escalating geopolitical and financial risks. This strategic allocation makes their purchases largely independent of short-term price fluctuations.
Looking ahead, Goldman Sachs maintains its assumption that central banks will buy an average of 70 tons of gold per month in 2026, indicating sustained official demand as a fundamental pillar for the gold market.
**Private Investors: A Potential "Amplifier" for Gold Prices** Beyond official sector demand, private investor behavior is seen as a critical variable for future gold price movements. The report suggests that increased private allocation to gold could have a notable "amplifying effect" on prices.
Goldman's model estimates that a 1-basis-point (0.01%) increase in gold's share of U.S. private financial portfolios (defined as stocks and bonds) would lift gold prices by about 1.4%. Currently, gold ETFs—the most common gold-holding instrument for U.S. investors—account for just 0.17% of such portfolios, indicating substantial room for growth.
The bank expects private investor interest in gold to rebound as the Fed potentially shifts toward monetary easing, with inflows complementing central bank purchases to drive prices higher.
**"Tokenized Gold": Notable but Limited Impact** Addressing client inquiries about the role of "tokenized gold" like Tether Gold in recent gold rallies, Goldman Sachs concluded its influence has so far been "limited."
Data comparisons show that Tether Gold holdings rose by about 26 tons in Q3 2025, while Western gold ETF inflows totaled ~197 tons and central bank purchases reached ~134 tons. Clearly, tokenized gold's incremental demand remains small relative to traditional channels.
Goldman noted that tokenized gold is functionally similar to gold ETFs—both are backed by physical gold and provide price exposure. The key difference lies in blockchain-based ownership records, which may lower entry barriers for some investors but do not necessarily add significant intrinsic value. Thus, the bank views tokenized gold more as a partial substitute for ETFs rather than a major new demand source, though the trend warrants ongoing monitoring.
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