Central Banks Expected To Boost Gold Reserves Following Demand Boost

Central banks are expected to increase gold purchases throughout what remains of 2026, according to Goldman Sachs, as official institutions continue building reserves amid geopolitical uncertainty and concerns over long-term currency exposure.

The bank now expects central banks to buy around 60 tons of gold per month on average this year, after revising its estimates for official-sector demand.

A statement said its updated methodology showed “strong underlying interest in gold, and recent geopolitical developments are likely to reinforce diversification,” suggesting that reserve accumulation has remained a key force in the market despite periods of price weakness.

The outlook comes after a volatile start to the year for bullion. Oil prices surged on renewed Middle East tensions, reigniting inflation concerns and prompting investors to reassess expectations for US interest-rate cuts. Figures on Monday, 18 May, show that spot gold is hovering at around $4,530 per ounce — well below the late‑January peak of near $5,600.

Goldman Sachs has kept its bullish stance on bullion, projecting prices to reach $5,400 per ounce by year‑end, echoing similarly optimistic forecasts recently issued by UBS Group AG and ANZ Group Holdings Ltd.

Higher inflation risks and firmer bond yields have weighed on gold in the short term, given that the metal offers no income. But Goldman argued the longer-term fundamentals remain supportive, particularly as central banks continue to diversify away from heavy reliance on US dollar reserves.

Bank analysts noted that reserve managers are increasingly viewing gold as both a geopolitical hedge and a strategic store of value in an environment marked by fragmented trade relations and sanctions risk.