NEW YORK: Central banks are expected to step up gold-buying, helping prices to recover by year-end, according to Goldman Sachs Group Inc.
Purchases are expected to pick up to average 60 tonnes a month over 2026, analysts Lina Thomas and Daan Struyven said in a note dated May 15.
Under a revised framework, the 12-month moving average of purchases was 50 tonnes in March, up from a prior figure of 29.
For central banks, there’s “strong underlying interest in gold, and recent geopolitical developments are likely to reinforce diversification over time”, the analysts said, citing an in-house survey.
Gold has struggled since the outbreak of war in Middle East, as higher energy costs raised worldwide inflationary pressures, making central banks unlikely to ease policy.
With no end to the conflict in sight, global bond markets have sold off, putting pressure on non-yielding gold.
Goldman’s assessment of official-sector activity follows an upbeat assessment from the World Gold Council.
The group estimated central-bank purchases at 244 tonnes in the first quarter, up from 208 tonnes in the prior three months.
Spot gold traded near US$4,534 an ounce yesterday, compared with a record just below US$5,600 set in late January.
Goldman maintained a bullish target for prices to climb to US$5,400 an ounce by year-end, following similar calls from UBS Group AG and ANZ Group Holdings Ltd.
Still, in the near term, Goldman was cautious. Gold is “a natural source of cash if private investors face liquidity needs – if equity markets sell off amid higher rates and weaker growth expectations”, the analysts said. — Bloomberg
