Sovereign gold buying could push prices toward $5,400: Goldman Sachs

Gold bars

Goldman Sachs said the current slowdown in global central bank purchases of gold is a “temporary phenomenon” driven by sharp price volatility, stressing that the broader trend still reflects a strong desire to bolster strategic gold reserves.

In a report released Friday, the bank noted a wide “structural gap” between current gold allocations in emerging market central bank reserves and their targeted levels, which would likely trigger substantial liquidity inflows into the market once the current wave of volatility subsides.

Discussions with reserve managers revealed that monetary authorities remain committed to gold as a key hedge against geopolitical risks and global financial disruptions, while adopting what the bank described as “tactical patience” pending calmer market conditions.

Looking ahead, Goldman Sachs expects the combined momentum of institutional buying and a return of retail investors — supported by anticipated US interest rate cuts — to drive gold prices toward as high as $5,400 per ounce by the end of 2026.