Global Central Banks Bought 81 Tonnes of Gold in May; China's 48-Tonne Monthly Purchase Hits Over One-Year High
Taylor Wilson
Central banks bought 81 tonnes of gold in May, with China accounting for 48 tonnes — its largest single-month purchase in over a year. Goldman Sachs holds its year-end target of $4,900/oz, calling the structural shift far from over.
How big is 81 tonnes?
Goldman's real-time tracker estimates central banks bought 81 tonnes in May. The seasonally adjusted three-month average sits at 67 tonnes per month.
This means → the current pace is nearly four times the pre-2022 average of roughly 17 tonnes per month — no longer a one-off spike but a sustained structural acceleration.
China's 48-tonne haul was the largest single-month purchase in over a year and the primary driver of the acceleration.
Why are central banks hoarding gold?
Goldman restates the core thesis: after Russia's foreign-exchange reserves were frozen in 2022, emerging-market central banks accelerated reserve diversification — spreading holdings from dollar assets into gold and other stores of value to reduce dependence on any single currency.
This reflects a deeper shift: the trust fracture between sovereign holders and the dollar system has not healed, and gold's appeal as a "no-sovereign-risk asset" keeps rising.
Goldman holds its year-end 2026 target of $4,900 per ounce and sees price risk tilted to the upside.
Where is the short-term pressure coming from?
Markets currently price a Fed rate hike this year. That suppresses demand for currency-depreciation hedges and drags down rate-sensitive gold-ETF holdings.
In plain terms = if the market believes the Fed will hike, the opportunity cost of holding gold — which pays no interest — rises, and short-term money pulls out first.
Goldman's economists, however, expect the Fed will not actually hike, viewing this pressure as a passing phase that does not alter the long-term direction.
What does UBS see in the current price?
UBS strategist Joni Teves says gold is in a "recalibration" phase — the market is digesting shifting rate expectations. She frames this as basing, not reversing.
She notes that despite renewed hike expectations, gold has held near $4,000 per ounce, a sign that "floor support remains intact."
Teves expects a narrow trading range through a thin-liquidity summer but maintains her call for a year-end rebound, supported by portfolio diversification demand and official-sector buying.
What should investors watch next?
Goldman notes that gold's share in private portfolios remains low. Tensions around Iran and broader geopolitical stress could accelerate private-investor allocation.
This means → beyond central-bank buying, a pool of private capital has yet to enter at scale — once triggered, it would create a second pillar of demand.
Whether central-bank purchases can sustain their elevated pace is the key variable for confirming that the price floor holds.
Content is for reference only, not financial advice.