Goldman Sachs has kept its bullish outlook on gold intact, reiterating a year-end price objective of $5,400 per troy ounce while raising its view of central bank demand. The Wall Street firm said it had revised a proprietary nowcast that tracks sovereign buying after concluding the previous model had consistently undercounted purchases since August 2025.
Under the updated methodology, Goldman’s 12-month moving average nowcast of central bank gold demand stood at 50 tonnes per month as of March, a sharp increase from the 29 tonnes per month implied by the earlier model. The bank noted the revision materially altered its view of recent flows: the new figures suggest central banks bought 66 tonnes in January alone, compared with just 12 tonnes under the prior estimate.
The recalibration follows what Goldman described as a widening disconnect between gold leaving London vaults and the corresponding movements captured in U.K. trade statistics. While outflows from London vaults had been rising, U.K. export data were no longer fully reflecting those flows, indicating that some sovereign gold transactions were not being recorded in official trade numbers.
"We therefore adjust our nowcast by adding the discrepancy between London vault outflows and UK net exports as unrecorded sovereign gold flows," Goldman strategists Lina Thomas and Daan Struyven wrote in a note.
Looking forward, Goldman expects central bank purchases to average 60 tonnes per month through 2026. The bank pointed to responses from its own central bank survey showing "strong underlying interest in gold," and added that recent geopolitical developments "are likely to reinforce diversification over time - both for central banks and private investors."
Despite the stronger medium-term outlook, the strategists sounded a note of caution about the near term. They highlighted gold’s role as a highly liquid asset and warned that private investors could tap that liquidity if they face cash needs, potentially prompting price pressure. Specifically, Goldman flagged the risk of a selloff if equity markets come under stress because of higher interest rates or weaker growth expectations tied to geopolitical uncertainty.
Goldman’s nowcast relies on U.K. customs data because London’s over-the-counter market is the primary venue for sovereign gold transactions. The bank explained that the U.K. has no meaningful domestic gold production, so gold traded in London must be imported and either retained in vaults or exported. That trade flow dynamic makes U.K. customs and vault statistics a useful proxy for tracking where gold ultimately ends up.
The combination of a revised measurement approach, survey evidence of central bank interest, and the potential for geopolitically driven diversification underpins Goldman’s decision to maintain an elevated price target while raising its estimate of official sector buying. The bank’s updated outlook implies significantly higher sovereign accumulation than previously recorded, even as it acknowledges risks that could weigh on gold in the short term.
Summary
Goldman Sachs has adjusted its central bank demand nowcast upward after identifying unrecorded sovereign flows, lifting the 12-month moving average to 50 tonnes per month as of March. The bank reaffirmed a year-end gold price target of $5,400 per troy ounce and expects central bank purchases to average 60 tonnes per month through 2026, while warning of potential short-term selling pressure if private investors draw on gold liquidity amid equity market stress.
Key points
- Goldman raised its 12-month moving average nowcast to 50 tonnes per month as of March, up from 29 tonnes per month under the previous model.
- Revised figures imply central banks purchased 66 tonnes in January, compared with 12 tonnes in the prior estimate.
- Goldman projects central bank purchases will average 60 tonnes per month through 2026 and retained a year-end gold target of $5,400 per troy ounce.
Sectors impacted
- Central bank reserve management and sovereign balance sheets
- Precious metals and bullion markets
- Financial markets broadly, including equity investors who may reallocate into or out of gold
Risks and uncertainties
- Short-term selloff risk - Gold’s high liquidity could lead private investors to sell holdings to meet cash needs, applying downward pressure on prices.
- Market sensitivity to macro shocks - Equity market stress driven by higher rates or weaker growth expectations tied to geopolitical uncertainty could trigger asset rebalancing and volatility.
- Data limitations - Discrepancies between London vault outflows and U.K. trade data create uncertainty around the precise scale of sovereign flows until recording gaps are resolved.