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    Central banks pile into gold: long-term price floor and project signals for miners

    October 24, 2026|

    Reviewed by Tom Sullivan

    Central banks pile into gold: long-term price floor and project signals for miners

    First reported on MINING.com

    30 Second Briefing

    Central banks bought an estimated 79 tonnes of gold in August, nearly five times the historical monthly average of 17 tonnes, with China accounting for about 25 tonnes as it accelerates reserve diversification away from US dollar assets, Goldman Sachs estimates. The People’s Bank of China reported adding about 20 tonnes in August and then its largest monthly increase in roughly three years in September, marking 23 consecutive months of purchases. Sustained official-sector demand at these elevated levels is expected to provide a structural price floor for bullion, influencing long-term project economics and mine development decisions.

    Technical Brief

    • Goldman Sachs’ model infers central bank demand from trade and flow data, not self-reported reserves.
    • Its inferred Chinese August buying exceeds the People’s Bank of China’s officially reported ~20 tonnes.
    • PBOC’s September addition was its largest monthly increase in about three years.
    • September marked the 23rd consecutive month of reported PBOC gold purchases, indicating a sustained programme.
    • Reserve diversification is explicitly linked to sanctions risk after Western governments froze Russian assets in 2022.
    • Central banks are described as less sensitive to short-term price moves than ETF and speculative investors.
    • Official-sector demand is characterised by Goldman as a structural, enduring bullion-market feature rather than a cyclical phase.

    Our Take

    Goldman Sachs appears repeatedly in our gold and bullion coverage, including its June 2026 downgrade of the end‑2026 gold price forecast, which suggests that sustained central‑bank buying by the PBOC and others may be one of the few firm demand pillars offsetting more cautious investment‑bank price views.

    With China, Russia and the United States all central to this gold‑buying narrative, the pattern aligns with our database’s observation that geopolitical flashpoints (notably the Russia‑Ukraine conflict and Middle East tensions) are increasingly correlated with outsized central‑bank flows into bullion rather than into oil‑linked assets.

    The jump from a pre‑2022 average of 17 tonnes/month to an estimated 79 tonnes in August implies that central‑bank demand is now large enough to influence project‑financing assumptions for new gold mines in our Projects‑tagged coverage, as developers can more credibly model a structurally higher official‑sector bid under Fed policy uncertainty.

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    Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.

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