The central bank's continued gold purchases provide a solid bottom for gold prices, and the hawkish Federal Reserve causes short-term suppression, with a mid-term outlook of $4,900
A Goldman Sachs report pointed out that global central banks purchased 81 tons of gold in May, of which China's central bank purchased 48 tons of gold, making it the largest buyer.
A Goldman Sachs report pointed out that global central banks purchased 81 tons of gold in May, of which China's central bank purchased 48 tons of gold, making it the largest buyer. The central bank's continued gold purchases have provided a solid bottom for gold prices and can hedge against short-term interest rate pressures expected to come from a hawkish Federal Reserve. Structurally, the diversification of central bank reserves in emerging markets is the core factor supporting gold prices reaching US$4,900 per ounce by the end of 2026. In the short term, gold is dragged down by the Fed's interest rate hike pricing and weak demand for ETFs, but in the medium to long term, as the Fed's easing cycle begins, the pressure will ease. There is a consensus that the market is optimistic about gold prices in the long term, but the intensity and persistence of the central bank's gold purchases, as well as its logic of hedging interest rate pressure, may be underestimated by some investors. One-sentence conclusion: The central bank's continued strategic gold purchases form the strongest "support" for gold prices, and short-term interest rate pressures will not change the trend of rising to $4,900 per ounce in the medium term. Positive/negative: Positive for gold-related assets, such as SPDR Gold Trust (GLD.US), Barrick Gold (GOLD.US), and Zijin Mining (2899.HK). The market's optimism about gold has been partially reflected, but the continued impact of structural factors such as central bank gold purchases may not yet be fully priced in. Catalysts: 1) Monthly official gold reserve data from central banks; 2) Federal Reserve interest rate meeting and dot plot.