Goldman Sachs has set a striking target for gold prices, projecting a surge to $4,900 per troy ounce by the end of 2026. This forecast emerges amid unprecedented central bank engagement, signaling a fundamental shift in how global reserves are managed. May alone saw central banks acquire 81 tonnes of gold, with China purchasing 48 tonnes, highlighting a new reserve accumulation pattern.

Central Bank Buying as a Structural Shift

The monthly average buying rate, adjusted seasonally over three months, stands at 67 tonnes almost four times the 17 tonnes per month average before 2022. Such increased accumulation marks a departure from short-term tactical reserve adjustments to a strategic repositioning. Goldman Sachs interprets this trend as a reaction to geopolitical turbulence sparked in 2022 when Western sanctions froze Russian foreign currency reserves, nudging emerging market central banks to diversify holdings away from dollar assets.

China’s role is key. Its 48 tonnes purchase in May serves as an indicator not only of its own reserve strategy but also reflecting broader tendencies among emerging economies to prioritize gold as a hedge against geopolitical risks and Western fiscal instability. This sustained buying establishes a solid price floor for gold, offering investors and markets a durable underpinning that contrasts with prior volatile gold price dynamics.

Balancing Near-Term Challenges and Long-Term Upside

Gold’s rally is not expected to be linear. Near-term headwinds include pressure from hawkish Federal Reserve policies, which elevate the opportunity cost of holding non-yielding assets like gold. Some investors anticipate rate hikes this year, weighing on demand, particularly via rate-sensitive ETFs. Yet, Goldman’s economists currently foresee no forthcoming rate hikes, suggesting these pressures are temporary.

plus private investors remain underexposed to gold, representing a latent demand reservoir. Should geopolitical tensions escalate or reserve diversification trends accelerate, private portfolios may expand their gold allocations, amplifying upward price momentum beyond central bank purchases alone.

  • Central banks bought 81 tonnes in May 2026
  • China accounted for 48 tonnes, the largest buyer
  • Monthly buying averages 67 tonnes vs 17 tonnes pre-2022
  • Goldman projects 50 tonnes monthly in 2026 and 40 tonnes in 2027

This material is informational and does not constitute financial advice.