Gold price will hit $4,900/oz in 2026 on strong sovereign demand as China buys 75% more than reported in July – Goldman Sachs

Central bank gold purchases remained strong through July, and China appears to be buying far more bullion than official reports have disclosed, supporting a year-end price target of $4,900 per ounce, according to Goldman Sachs Research. “Our GS nowcast estimates central bank purchases of 44 tonnes in July (vs. a pre-2022 average of 17 tonnes), with a large contribution from China,” wrote Lina Thomas and Daan Struyven in a recent research note. “On a 3-month seasonally adjusted basis, the trend stands at 91 tonnes/month.” Goldman continues to see “net upside risk” to its $4,900 per ounce year-end gold forecast, but the analysts also warned of greater two-sided volatility along the way. “Our fair-value forecast of $4,900/oz by end-2026 assumes continued strong central bank demand — with average purchases of 50 tonnes/month in 2026 and 40 tonnes/month in 2027 —alongside a recovery in private investor ETF demand as the Fed remains on hold in 2026,” Thomas and Struyven wrote. “It does not incorporate elevated demand for global macro-policy hedges through gold call options. If ETF investor inflows recover and the current elevated call option positioning persists, dealer hedging could mechanically amplify the rally and drive gold prices well above our forecast.”

Goldman Sach Research estimated that China purchased 35 tonnes of gold in July – nearly double the AA tonnes China reported in its official public disclosures – making it by far the largest buyer during the month. As official figures often understate the real amount of gold bullion purchased by central banks, Goldman Sachs Research’s nowcast model also tracks the volumes of gold moving through London’s over-the-counter (OTC) market into domestic vaults or third-party custodian firms, enabling the model to reflect buying that does not appear in official reserve data. The Bank of England’s gold holdings on behalf of foreign central banks rose by 63 tonnes in July – an amount that far exceeded the decrease in the Federal Reserve’s New York vaults during the month. Based on this, the Goldman analysts concluded that “additional recent central bank purchases are not captured in our July nowcast estimate.”

Earlier this month, Thomas and Struyven wrote that gold prices will rise to $4,900 per ounce by the end of 2026 amid strong demand from central banks seeking to diversify their foreign currency reserves, while investors using gold derivatives to hedge may be making the yellow metal more volatile. “Gold is projected to extend its recent gains in the second half of 2026, even as growing use of some derivatives tied to the metal could be making gold prices more volatile,” Thomas and Struyven wrote at the time. The firm forecasts the precious metal’s price will rise to $4,900 per ounce by the end of the year as central banks continue diversifying their reserves and markets scale back expectations for U.S. rate hikes in 2026. The analysts see central bank demand as a key structural factor underpinning gold’s rally. “We continue to see elevated central bank gold accumulation as a multi-year trend, as central banks diversify their reserves to hedge geopolitical and financial risks, consistent with recent survey evidence,” Thomas and Struyven said. Goldman Sachs Research forecasts central banks will buy an average of 50 tonnes of gold per month in 2026, up from an average of 17 tonnes per month in the ye...