Central bank and institutional gold purchases

ETFs, in particular, are poised to capitalize on this opportunity. With gold prices projected to rise significantly, fund managers are likely to view the current dip in positions as a chance to bolster their holdings at relatively favorable prices. This anticipated buying activity is expected to lend further support to gold prices, aligning with Goldman Sachs’ bullish projections for the coming years.

This rate is slightly below Goldman’s previous forecast of 80 tonnes per month by mid-2026 in the London OTC market. Despite this, the strong demand continues to bolster gold’s appeal as a stable asset.

In May alone, total gold purchases amounted to 31 tonnes, excluding the U.S. Among the key players, China emerged as the leading buyer, adding 15 tonnes to its reserves. This strategic accumulation by central banks and institutions underscores their influence on the global gold market.

Market forecasts and previous predictions

Despite this robust buying trend, the current rate slightly underperforms Goldman Sachs’ previous prediction, which anticipated an average of 80 tonnes per month by mid-2026 in the London OTC market.

Recent trends in fund positions have indicated a shift in the dynamics of gold investments, providing potential buying opportunities for both exchange-traded funds (ETFs) and central banks. Following the peak in April, there has been a noticeable decrease in net positions held by funds. This decline suggests that some investors may have taken profits or reallocated their portfolios, thereby creating a temporary lull in demand. However, this scenario presents a strategic entry point for new or increased acquisitions by institutional players.

With market volatility and inflation concerns persisting, gold remains an attractive safe haven for investors looking to diversify and secure their portfolios. The projected rise to US,700 per ounce by the end of 2025, leading up to US,000 by mid-2026, reflects a robust confidence in gold’s enduring value.

Trends in fund positions and buying opportunities

Goldman Sachs predicts a significant increase in gold prices, with central banks and institutions playing a pivotal role. From January to May 2025, these entities have been purchasing an average of 77 tonnes of gold monthly. This buying activity is critical as it supports the forecasted rise in gold prices.

The updated forecasts also reflect a nuanced understanding of market cycles and investor behavior. Goldman Sachs had anticipated some volatility in the gold market, factoring in periods of both accelerated and tempered buying. The bank’s analysts have noted that while the overall pace of accumulation is slightly below initial predictions, the strategic purchases by key players, particularly in Asia, continue to support a bullish outlook for gold prices.

Moreover, central banks, especially in emerging markets, continue to demonstrate a keen interest in gold as a safeguard against currency volatility and inflationary pressures. The slight reduction in net fund positions does not diminish the strategic importance of gold in their reserves. On the contrary, it reinforces the metal’s role as a hedge and a stable asset in times of economic uncertainty.

Goldman Sachs has been closely monitoring gold market trends and has consistently updated its forecasts to reflect changing economic conditions. The bank’s prediction of gold reaching US,000 by mid-2026 is anchored in a detailed analysis of global economic indicators, including inflation expectations, currency fluctuations, and geopolitical tensions. Previous forecasts had suggested a slightly more aggressive accumulation of gold reserves by central banks, aiming for 80 tonnes per month by mid-2026. This adjustment to 77 tonnes indicates a recalibration based on current purchasing patterns and market dynamics.

Gold demand and central bank activity

As we delve into market trends and predictions, it’s crucial to note the nuanced shifts in investor sentiment. Fund net positions in gold have seen a decrease from April highs, which paradoxically opens the door for increased buying opportunities. This scenario presents a fertile landscape for ETFs and central banks to step in and augment their gold holdings.

Goldman Sachs predicts a significant rise in gold prices, with expectations it will hit US,000 by mid-2026. A key factor driving this upward trend is the aggressive gold purchasing by central banks and institutions. From January to May 2025, they have been buying an average of 77 tonnes of gold monthly.

Goldman Sachs remains confident in its projection, underscoring its analysis with historical data and forward-looking assessments of economic policy and international trade relationships. The bank’s previous predictions have been a reliable barometer for market participants, providing a benchmark for investment strategies and portfolio diversification.

In May alone, total purchases reached 31 tonnes, excluding the U.S., with China leading as the primary buyer, adding 15 tonnes to its reserves. Such substantial buying activity highlights the sustained interest in gold as a hedge against economic uncertainties.

As ETFs and central banks look to leverage these buying opportunities, market participants can expect an intensification of gold acquisition activities. This trend, coupled with the ongoing geopolitical and economic factors, is likely to uphold the positive momentum in the gold market, paving the way for the predicted price trajectories set forth by Goldman Sachs.

The recalibration in Goldman’s forecast from an 80-tonne monthly purchase rate to 77 tonnes underscores a dynamic market environment where demand is influenced by both geopolitical factors and macroeconomic indicators. As such, traders and investors alike are advised to closely monitor central bank policies and institutional purchasing patterns, as these will be pivotal in shaping gold’s trajectory in the coming years.