Goldman Sachs commodity strategists have indicated that central bank gold purchases in the first half of 2026 have surpassed prior expectations, with further demand anticipated in the latter half of the year.
In March, Goldman Sachs revised its forecast for central bank gold buying. The new projection, based on a 12-month moving average, is approximately 50 tonnes per month, a significant increase from the previous estimate of 29 tonnes per month. For the second half of 2026, central banks are expected to maintain average monthly gold reserve additions of around 60 tonnes, driven by persistent diversification demand amid geopolitical uncertainties.
The analysts noted that their earlier forecasts had consistently underestimated sovereign demand since August 2025. This discrepancy arose because UK trade data began to inadequately capture gold outflows from London vaults, leading to unrecorded sovereign purchases.
Goldman Sachs also observed that strong interest in gold from institutions and investors remains evident. The firm forecasts an international gold price of $5,400 per ounce by the end of 2026. However, it cautioned that the price could face short-term pressure if investors are forced to sell liquid assets, including gold, to raise cash during periods of market stress.
The analysis further highlighted a shift in gold's role. Unlike previous hedges tied to specific events, such as the U.S. election in November 2024, gold positions held to mitigate risks like U.S. fiscal sustainability are seen as more stable this year and less likely to be significantly adjusted.
Emerging market central banks are "likely to continue diversifying their foreign exchange reserve structures toward gold," the strategists added. Concurrently, currency depreciation is prompting high-net-worth families to purchase physical gold and investors to buy options contracts.
Comments