Global Central Banks Resume Gold Buying, Creating Opportunities for Market Upsurge
After a brief summer lull, central banks worldwide are once again significantly purchasing gold, providing strong support for gold prices. According to the latest report from Goldman Sachs, in September, central banks purchased approximately 64 tons of gold, more than tripling from the previous month. This indicates an accelerating trend towards diversified official reserves.
Goldman Sachs highlights that the Chinese central bank's gold purchasing activities are particularly noteworthy—adding about 15 tons of gold to foreign exchange reserves in September alone. This continues China's trend of accumulating gold since 2023 and has spurred similar actions in other emerging markets, steadily increasing the proportion of gold in the global official reserves system.
Goldman Sachs: Gold Purchasing Trend May Continue Until 2026
The report's main author, Lina Thomas, and her team note that central banks' ongoing gold purchases over the past three years have become a core driver of gold's long-term price increase. Goldman Sachs forecasts that from the fourth quarter of 2024 to the end of 2026, global central banks will maintain an average net gold purchase of around 80 tons per month, reaching a stable high in recent years.
Analysts point out that this trend is not a short-term speculative action but a reflection of a structural adjustment in the global monetary system. Amid persistent inflation, geopolitical tensions, and the potential erosion of the dollar’s dominant reserve status, gold is once again receiving strategic favor from central banks.
Goldman Sachs candidly states in the report: "The ongoing purchases by central banks form the underlying support structure of the gold market. Regardless of how ETF inflows or private investments oscillate, the long-term demand from official sectors will provide a robust backing for gold prices."
Multiple Factors Fuel Gold Price Upsurge
Gold prices have been rising steadily since the beginning of the year, reaching a historic high of $4,380 per ounce in October. Though some adjustments followed, prices remain above $4,060 early this week, with an annual increase of about 55%.
In Goldman Sachs' view, besides central banks' increased holdings, other driving forces include:
- Federal Reserve Policy Expectations—The market broadly anticipates an interest rate cut cycle starting in early 2025, driving up demand for safe-haven assets.
- Increased ETF Inflows—Institutional investors are repositioning in precious metals to hedge against inflation and market volatility.
- Heightened Geopolitical Risks—Middle East turbulence and global supply chain tensions further enhance gold’s appeal as a safe haven.
Goldman Sachs Raises Gold Price Forecast to $4,900
Based on robust central bank gold buying and dual support from private investment demand, Goldman Sachs reaffirms its gold price forecast: Prices could climb to $4,900 per ounce by the end of 2026, setting a historic high. If private investors continue to increase gold holdings, this target price may be revised upward.
The report notes that gold will continue to play a key role in the global financial system, serving as a core asset for hedging against policy uncertainty and systemic risks. Goldman Sachs emphasizes: "In the coming years, gold will not only be a safe haven but also a 'strategic anchor' in the reshaping of the monetary system."
Investor Confidence Rebounds, Optimistic Market Outlook
Market observers generally believe that as global central banks ramp up gold purchases, the gold market has entered a new upswing cycle. Although it may briefly be affected by dollar fluctuations and US Treasury yields, the long-term trend remains upward.
Goldman Sachs concludes that the complexity of the global economy and the fragility of the financial system make gold's role in diversified reserves and wealth preservation increasingly prominent. "Regardless of how market winds change, gold will continue to stand as the safe harbor of global capital."
