Central Banks Drive Gold Purchases Amid Geopolitical Tensions

Goldman Sachs has reported a significant increase in gold purchases by central banks, estimating that 64 tonnes were acquired in September 2025, a notable rise from 21 tonnes in August. This trend is attributed to central banks diversifying their reserves to mitigate geopolitical and financial risks. The firm anticipates that this buying spree is likely to continue into November, with an average monthly purchase of 80 tonnes expected through the fourth quarter of 2026.

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China has been a major player in this central bank buying trend, reportedly adding an estimated 15 tonnes of gold to its foreign exchange reserves in September. However, this figure contrasts sharply with the 1.24 tonnes that China officially reported for the same month. Analysts suggest that the actual purchases by China could be much higher, with estimates indicating that the country could accumulate as much as 250 tonnes of gold this year. This discrepancy highlights the opaque nature of gold purchases, as many countries underreport their acquisitions to avoid market speculation and potential geopolitical repercussions.

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The surge in central bank gold buying has been a key driver behind the rising gold prices, which reached an all-time high of over $4,380 per ounce in October 2025 before experiencing a slight pullback. Goldman Sachs maintains its price target of $4,900 per ounce by the end of 2026, driven by sustained central bank purchases and increased inflows from private investors. The firm notes that gold prices have already gained 55% in 2025, influenced by economic uncertainties and expectations of further interest rate cuts by the U.S. Federal Reserve.

China raised gold reserves by 15 tonnes in September, Goldman saysCityLabReutersBenzinga

Despite the bullish outlook, there are concerns regarding the lack of transparency in central bank gold purchases. The World Gold Council estimates that only about one-third of global central bank buying is reported to the International Monetary Fund (IMF), down from approximately 90% four years ago. This lack of disclosure can create uncertainty in the market, as traders rely on indirect measures to gauge actual buying activity. Analysts have pointed out that the reluctance to fully disclose purchases may stem from a desire to avoid front-running in an increasingly illiquid market.

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• “We continue to see elevated central bank gold accumulation as a multi-year trend, as central banks diversify their reserves to hedge geopolitical and financial risks,” — Goldman Sachs Analysts

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• “Unlike oil, where you can track it with satellites, with gold you can’t. There’s just no way to know where this stuff goes and who is buying it,” — Jeff Currie, Chief Strategy Officer of Carlyle

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• “Gold is seen as a pure USA hedge. In most emerging markets, it is in central banks’ interest not to fully disclose purchases.” — Nicky Shiels, Analyst at MKS Pamp

Benzinga

As central banks, particularly China, continue to ramp up their gold purchases, the market is poised for further price increases. Goldman Sachs' projections reflect a broader trend of reserve diversification in response to ongoing geopolitical and financial uncertainties. The opacity surrounding these transactions, however, raises questions about the true scale of demand and its implications for the gold market.

Benzinga