TLDR
- Goldman Sachs forecasts gold will reach $4,900 per ounce by end of 2026
- Central banks bought 81 tonnes of gold in May, with China accounting for 48 tonnes
- Monthly buying now runs at 67 tonnes, far above the pre-2022 average of 17 tonnes
- Near-term pressure from hawkish Fed pricing is seen as temporary
- Goldman views central bank buying as a multi-year structural trend, not a short-term trade
Goldman Sachs has raised its gold price forecast to $4,900 per troy ounce by the end of 2026, pointing to record levels of central bank buying as the key driver behind the bullish call.
Goldman Sachs concludes central bank gold buying will provide a strong price floor for the metal. pic.twitter.com/7qOJpjpDAT
— Steve Hanke (@steve_hanke) July 20, 2026
The bank’s analyst Lina Thomas published the note on Friday, estimating that central banks purchased 81 tonnes of gold in May alone. On a three-month seasonally adjusted basis, that works out to 67 tonnes per month — nearly four times the pre-2022 average of 17 tonnes.
China was the largest single buyer in May, accounting for 48 of those 81 tonnes. Goldman views Chinese demand as a bellwether for broader reserve behavior among emerging market central banks.
Why Central Banks Are Buying
The surge in buying traces back to 2022, when Western nations froze Russia’s foreign currency reserves following the invasion of Ukraine. That move prompted many emerging market central banks to rethink how they hold their reserves.
Goldman says those banks are now treating gold as a strategic asset rather than a short-term position. Reserve managers cite geopolitical risk, concerns over Western fiscal stability, and a desire to diversify away from dollar-denominated holdings.
The bank maintained its assumption of average monthly central bank purchases of 50 tonnes in 2026 and 40 tonnes per month in 2027. That level of institutional demand, Goldman argues, creates a durable price floor under the market.
Near-Term Headwinds
Goldman does not see the path to $4,900 as straightforward. Gold faces short-term pressure from hawkish Federal Reserve pricing, with some market participants pricing in possible rate hikes this year.
Rate-sensitive ETF flows have also been soft. When investors expect higher interest rates, the opportunity cost of holding gold rises, which can weigh on demand from private investors.
However, Goldman’s own economists do not forecast any Fed rate hikes. The bank expects that near-term pressure to fade, leaving the medium-term outlook tilted to the upside.
Private Portfolios Still Underweight
One additional factor in Goldman’s forecast is that private investors still hold relatively little gold. The bank notes that gold’s share in private portfolios remains low, which leaves room for further buying if geopolitical conditions push more investors toward the metal.
Goldman says any acceleration in geopolitical tensions or reserve diversification could pull private capital into gold on top of the central bank flows already in play.
The bank’s $4,900 target reflects a view that gold remains in a structural bull market, with institutional buying providing consistent support even during periods of softness.
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