China gold buying may be running far above official figures, according to new estimates from Goldman Sachs. The bank said China bought more than 48 tonnes in May through the London over-the-counter market. That was the biggest monthly purchase in more than a year. It was also nearly five times the 10 tonnes reported by the People’s Bank of China for that month.
Goldman Sachs said the gap may extend through 2026. Official data show China’s central bank added 40 tonnes to reserves so far this year. That total includes a 15-tonne increase in June, which marked the largest monthly rise in at least two and a half years. It also marked the 20th straight month of reserve growth.
China Gold Buying Estimate Widens Gap
Using a more cautious measure, Goldman Sachs said China’s total purchases this year may be closer to 80 tonnes. The bank used a 2.0 times multiplier on the year-to-date official figure. However, the May estimate implied a much larger ratio of about 4.8 times.
Goldman Sachs also pointed to its central bank gold nowcast. That model showed purchases at 81 tonnes in May. Meanwhile, the three-month seasonally adjusted pace stood at 67 tonnes per month. That compared with a pre-2022 average of 17 tonnes a month.
Central Bank Demand Supports Gold
The bank said China drove much of the recent pickup in buying. Therefore, Goldman Sachs said this trend should help set a floor under gold prices. However, it also said gold faces near-term pressure from hawkish Federal Reserve rate expectations.
Goldman Sachs described strong central bank demand as a multi-year trend tied to reserve diversification. It said central banks are using gold to hedge geopolitical and financial risk. The bank kept its end-2026 gold price forecast at $4,900 per troy ounce. It also maintained assumptions of 50 tonnes in average monthly central bank buying in 2026 and 40 tonnes in 2027.
While near-term pressure could continue if markets price in possible Fed hikes, Goldman Sachs said medium-term price risks still point higher. Additionally, the bank said private portfolios still hold little gold exposure.
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Source: InvestingLive
