Goldman Sachs Raises Its Nowcast for Central Bank Gold Buying, Maintains a Constructive View on Gold

Overview

This report focuses on revising the estimate of central bank gold purchases. Goldman Sachs notes that since August 2025, the original GS central bank gold nowcast has systematically underestimated the flow implied by changes in London physical gold inventories. To correct this bias, the report adds the gap between London vault outflows and UK net exports to unrecorded sovereign gold flows, thereby materially raising the recent estimate of central bank gold buying.

Core views

The core view is that central bank gold buying has not been as slow as the previous model suggested and may still reaccelerate in 2026. The updated model shows 12-month rolling purchases of 50 tonnes per month in March 2026, versus 29 tonnes per month in the old model. Goldman Sachs expects central bank buying to average 60 tonnes per month in 2026, supported by potential central bank interest in gold, geopolitical risks, and reserve diversification needs. The report therefore remains bullish on gold and keeps its year-end 2026 target price of $5,400/toz, while also warning that gold could be a source of cash for investors during market stress because of its high liquidity.

Analysis framework

The report uses UK customs trade data and London vault inventory outflow data to infer central bank gold purchases. The original method treated central bank demand as bullion exported from the UK to the rest of the world excluding Switzerland, plus the portion of UK exports to Switzerland identified as central bank demand. Because recent London vault outflows are no longer fully reflected in UK trade data, the report further adds the gap between London vault outflows and UK net exports to the model as unrecorded sovereign gold flows.

Methodology notes

• Commodity supply-demand and flow estimationGS central bank gold nowcast

  Infers actual central bank gold demand from UK gold trade data and London vault inventory flows.

  The London OTC market is an important venue for sovereign buyers to trade gold, and the UK itself produces almost no deliverable gold. Gold flowing into London is therefore either stored in vaults or re-exported. The report uses UK export data and London vault outflow data to estimate central bank gold buying.

• Model adjustmentUnrecorded sovereign gold flow adjustment

  Treats the gap between London vault outflows and UK net exports as unrecorded sovereign gold flows.

  Since August 2025, London vault data have shown gold outflows, but UK trade data have not fully reflected these outflows, indicating that some sovereign transactions may not have been captured by customs statistics.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Gold

  Central bank gold buying is a medium-term demand support, and the report maintains a constructive view.

  Strengths

  Strong potential buying interest from central banks, geopolitical risks encouraging reserve diversification, and the updated model showing actual buying above earlier estimates.

  Weaknesses

  May face near-term pressure from private investors' liquidity needs and risk-asset selling.

  Comparison

  The updated model materially raised the estimated central bank gold buying for January through March 2026 versus the old model, and lifted the 12-month rolling average for March from 29 tonnes per month to 50 tonnes per month.

  Risks

  If the gap between UK trade data and London vault data is not sovereign buying, or if market liquidity pressure leads to gold selling, the conclusion may be biased.

Key data

• Updated 12-month rolling nowcast50 tonnes/month in March 2026The old model was 29 tonnes/month.
• 2026 central bank gold buying forecast60 tonnes/month on averageGoldman Sachs expects central bank buying to rebound to this level on average in 2026.
• Updated buying estimate for January 202666 tonnesThe old model was 12 tonnes.
• Updated buying estimate for February 202641 tonnesThe old model was 2 tonnes.
• Updated buying estimate for March 202618 tonnesThe old model was 13 tonnes.
• Gold target price$5,400/toz by end-2026The report reiterates this target price.

Impact & implications

If central bank gold buying is indeed higher than previously estimated and reaccelerates in 2026, the medium-term supply-demand support for gold will be stronger, especially against a backdrop of ongoing geopolitical risks and reserve diversification demand. This supports a constructive allocation view on gold. However, gold's safe-haven role does not eliminate near-term price volatility, because investors may also sell gold to raise cash when facing liquidity pressure.

Risks

• UK customs classification of sovereign gold transactions may be incomplete or inconsistent, leading to estimation errors.
• Interpreting the gap between London vault outflows and UK net exports as unrecorded sovereign flows carries methodological risk.
• Gold is highly liquid and may be sold by investors under market stress to meet cash needs.
• Higher rates, weaker growth expectations, and geopolitical shocks could trigger risk-asset volatility and affect gold prices in the near term.

What to watch

• Whether subsequent UK gold export data continue to diverge from London vault inventory outflows.
• Whether monthly central bank gold purchases rebound toward Goldman Sachs' expected level of 60 tonnes per month.
• Whether geopolitical events further strengthen asset diversification demand from central banks and private investors.
• The impact of global interest rates, equity market volatility, and liquidity stress on near-term gold trading demand.