Goldman Sachs Inc. continues to maintain its positive outlook on gold, reaffirming its year-end price target of $5,400.00 per ounce, as the bank raised its estimate for central bank gold purchases and expects buying to accelerate during the remainder of 2026.
The bank updated its model for forecasting gold demand by central banks, after discovering that it had been systematically underestimating purchases since August 2025. The twelve-month moving average under the updated model is now 50 tons per month as of March, a sharp increase from 29 tons per month under the previous model.
Updated figures indicate that central banks purchased 66 tons in January alone, compared to just 12 tons in the previous estimate.
This adjustment came amid a growing gap between gold leaving London's vaults and what British trade data was recording. Despite rising gold outflows from London's vaults, British export statistics no longer fully reflect these movements, suggesting that a portion of sovereign gold transactions went unrecorded.
Goldman Sachs Inc. strategists Lena Thomas and Dan Strofen said in a note: “We are therefore adjusting our real-time forecasting model by adding the gap between gold outflows from London’s vaults and net UK exports as unrecorded sovereign flows.”
Looking ahead, Goldman Sachs Inc. expects central bank purchases to average 60 tons per month through 2026. The bank based its forecast on the results of its own survey of central banks, which showed a strong and sustained interest in gold, noting that recent geopolitical developments are likely to promote diversification in the long term, both for central banks and private investors.
However, strategists are more cautious in the near term, writing: “Gold’s high liquidity makes it a natural source of cash flow if private investors face liquidity needs,” while warning of the risk of a sharp sell-off if equity markets come under pressure from rising interest rates or declining growth expectations related to geopolitical uncertainty.
Goldman Sachs Inc.'s real-time forecasting model relies on UK customs data, as the over-the-counter market in London is where most sovereign gold transactions take place. Since the UK has no significant domestic gold production, all gold traded within its borders must be imported and then either stored in London vaults or exported, making trade flow data a valuable tool for tracking the final destination of gold.
