Spot gold staged a modest rebound during Monday's Asian session, climbing back above the $4,000 mark to trade near $4,010 an ounce. The metal had slipped below the key $4,000 level last Friday, touching a three-month low.
Beyond short-term rebound momentum, a structural floor from persistent official-sector buying helped lift prices back above $4,000. Goldman Sachs estimates that global central banks purchased 79 tonnes of gold in August, more than four times the pre-2022 monthly average of 17 tonnes, a finding that is drawing wider attention. Some reserves are shifting from New York to London, with the Dutch central bank moving 86 tonnes. Strong official-sector buying provides a structural cushion for gold, though it does not guarantee a bottom — near-term direction still hinges on oil prices, yields and Federal Reserve expectations.
Central Bank Buying Runs Over Four Times Historical Pace, Goldman Estimate Draws Mainstream Attention
While speculators dump gold, central banks are quietly buying at more than four times the historical pace, and some have decided to store their gold in London rather than New York. Goldman Sachs estimates that global central banks bought 79 tonnes in August, far above the pre-2022 monthly average of 17 tonnes and a sharp acceleration from the bank's July estimate of 44 tonnes. On a three-month seasonally adjusted basis, purchases ran at about 85 tonnes per month. A major Asian country was the largest identifiable buyer, with estimated purchases of 25 tonnes, above the roughly 20 tonnes officially reported.
Estimation Method: Based on Trade and Capital Flow Data, Higher Than Official Disclosures
Goldman Sachs built its estimate using trade flow and cross-border capital flow data rather than relying solely on official central bank purchase disclosures. This method can capture buying that has not yet been formally announced or was completed through non-public channels, so its estimate is significantly higher than the World Gold Council's tally of net central bank purchases based on August official reports. Goldman Sachs believes some central bank buying is landing ahead of public data, causing a lag in official statistics. The framework also aligns with the bank's long-held view that official data tend to understate actual demand strength, and that markets should focus more on the true pace of purchases reflected in trade and capital flows.
Geographic Shift in Reserves: New York Down 40 Tonnes, London Up 46 Tonnes, Netherlands Moves 86 Tonnes
Another thread in the story is the adjustment of where gold is stored. During the reporting period, gold held at the New York Federal Reserve fell by about 40 tonnes, while Bank of England holdings rose by 46 tonnes, indicating a clear shift in storage from New York to London. The Dutch central bank subsequently confirmed it took six months to move a total of 86 tonnes of gold from New York and Ottawa to London. These operations are relocations of existing reserves aimed at optimizing custody locations and liquidity arrangements, and do not represent new gold demand. Markets need to distinguish between "geographic reallocation" and "net purchases" to avoid misreading transfers as incremental buying.
Market Implications: A Tug-of-War Between Structural Support and Short-Term Pressure
Goldman Sachs continues to view central bank buying as a structural support for the gold market rather than a fleeting phenomenon. That backdrop is especially critical amid recent price swings — last week gold briefly fell below $4,000 under the combined pressure of speculative selling, rising oil prices and rate concerns. Official-sector data shows that even as short-term speculative positions were heavily unwound, long-term buyers kept accumulating. The tug-of-war between structural buying and short-term selling pressure means price pullbacks are more likely to offer buying opportunities than signal a trend reversal. Market participants should watch the persistence of central bank behavior rather than being swayed by short-term price noise.
Summary
Goldman Sachs estimates global central banks bought 79 tonnes of gold in August, more than four times the pre-2022 monthly average of 17 tonnes, or about 85 tonnes per month on a three-month seasonally adjusted basis, with a major Asian country the largest identifiable buyer. The estimate is based on trade and capital flow data and exceeds official disclosures, suggesting actual accumulation may be larger than public data. Reserves are geographically shifting from New York to London, with the Dutch central bank moving 86 tonnes, though this reflects reserve management rather than new demand. Global central bank buying constitutes structural support, underpinning the argument that pullbacks are absorbed by long-term buyers, but it does not guarantee a bottom — near-term gold prices still depend on oil prices, yields and Federal Reserve expectations, and official demand did not prevent last week's drop below $4,000.
As of 12:05 Beijing time, spot gold was quoted at $4,010.44 an ounce.
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