Goldman Sachs raises its central bank gold purchases nowcast, maintaining a year-end gold price target of $5,400/toz

Overview

This Goldman Sachs precious metals note focuses on central bank gold purchases. The report says the original GS nowcast had systematically underestimated gold flows implied by London physical balance data since August 2025, so Goldman Sachs updated its central bank gold purchase estimate methodology. After the revision, the 12-month moving-average purchase nowcast for March 2026 stands at 50 tonnes/month, above the old model's 29 tonnes/month.

Core views

The key view is that the slowdown in central bank gold buying has been less severe than previously thought and is still likely to reaccelerate in 2026. Goldman Sachs expects central bank gold purchases to average 60 tonnes/month in 2026, supported by the strong underlying interest shown in central bank gold surveys and by geopolitically driven reserve diversification demand. As a result, Goldman Sachs maintains a constructive view on gold and reiterates its end-2026 gold price target of $5,400/toz. However, the report also emphasizes the need for more caution in the near term, because gold's high liquidity means it may be sold by investors as a source of cash when markets come under pressure.

Analysis framework

The report assesses central bank gold purchases by revising the GS central bank gold purchases nowcast. The original method mainly used UK customs data to infer reported and unreported central bank buying because London OTC is an important venue for sovereign buyer transactions. The new method starts from the existing UK gold export data and adds the gap between London vault outflows and UK net exports, treating it as sovereign gold flow that may not be fully recorded in trade data.

Methodology notes

• commodities_flow_nowcastGS central bank gold purchases nowcast

  Central bank gold purchase nowcast

  This framework uses UK customs data and London gold inventory flows to estimate central bank gold purchases. The original version added UK gold bar exports to the world excluding Switzerland and UK exports to Switzerland identified as central bank demand; the updated version further adds the gap between London vault outflows and UK net exports to capture sovereign gold transactions that may not be fully recorded in trade statistics.

• physical_balance_analysisLondon vault outflows versus UK net exports

  Gap between London vault outflows and UK net exports

  The report argues that once gold enters London, it either remains in London vaults or is exported, so historically UK net exports should have tracked London vault outflows closely. Since August 2025, that relationship has weakened, suggesting that some sovereign transactions may not be fully reflected in UK trade data.

Asset mapping & comparison

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

• Gold

  Directly influenced by central bank buying, reserve diversification, and safe-haven demand

  Strengths

  Underlying central bank buying interest remains strong, geopolitical factors may reinforce diversification allocations, and Goldman Sachs maintains its end-2026 $5,400/toz target.

  Weaknesses

  In the near term, if markets need liquidity, gold may become a source of cash sales.

  Comparison

  The revised estimate of central bank gold buying is materially higher than the old model, indicating gold demand is not as weak as the old reading suggested.

  Risks

  Rising rates, weaker growth expectations, liquidity demand triggered by stock market selling, and model error caused by incomplete trade-statistics recording of sovereign gold flows.

• Precious Metals

  Gold is the core precious metal asset in the report, and the conclusion mainly maps to sentiment for the precious metals complex

  Strengths

  Central bank allocation demand and the geopolitical diversification narrative support precious metals.

  Weaknesses

  The report does not provide equally detailed supply-demand or pricing views for other precious metals.

  Comparison

  Compared with the broader precious metals complex, gold is more directly influenced by central bank buying and sovereign reserve allocation.

  Risks

  If gold is sold to meet liquidity needs, the precious metals complex may face sentiment drag.

Key data

• Revised 12MMA nowcast50 tonnes/monthAs of March 2026; the old model was 29 tonnes/month.
• Estimated central bank gold buying in January 202666 tonnesOld reading was 12 tonnes.
• Estimated central bank gold buying in February 202641 tonnesOld reading was 2 tonnes.
• Estimated central bank gold buying in March 202618 tonnesOld reading was 13 tonnes.
• Expected average central bank gold buying in 202660 tonnes/monthGoldman Sachs expects buying to rebound and hold this average in 2026.
• Gold target price$5,400/tozGoldman Sachs reiterates its end-2026 target.

Impact & implications

If the revised nowcast is closer to actual central bank demand, gold's medium-term support may be stronger than the old model implied. Reserve diversification demand from both central banks and private investors, together with geopolitical uncertainty, provides a medium-term tailwind for gold prices. In the near term, however, gold may also be sold as a liquidity source during risk-asset drawdowns, creating periods of volatility.

Risks

• Gold's high liquidity may make it a selling source for investors to raise cash when risk assets decline.
• Higher rates and weaker growth expectations may trigger stock market selling and indirectly pressure gold in the near term.
• There is uncertainty in how central bank gold transactions are recorded in UK trade data, which may affect nowcast accuracy.
• Customs classification is made by customs officers, and transactions between non-sovereign parties and central banks may be difficult to identify as sovereign gold.

What to watch

• Whether central bank gold buying in 2026 approaches Goldman Sachs' expected 60 tonnes/month.
• Whether the gap between London vault outflows and UK net exports continues to widen or narrows.
• Changes in the share of UK exports to Switzerland identified as central bank demand.
• Whether geopolitical events continue to drive central bank and private investor demand for gold diversification.
• Whether higher rates, weaker growth expectations, and stock market volatility trigger near-term liquidity-driven selling in gold.