Key Takeaways:
Central banks are likely to add 100 to 120 tonnes of gold in the remainder of 2026, roughly double the pace recorded in the first four months, according to Societe Generale strategists who refined their interpretation of World Gold Council survey data.
"Applying this framework to the 2026 survey across both questions, and using the regression estimates, implies additional purchases of about 100 to 120 tonnes over the remainder of the year," Michael Haigh and Jeremy Sellem, strategists at Societe Generale, said in a note published Monday. "This is roughly double the volume recorded in the first four months and aligns with our broader call for a resumption in central bank buying."
Net central bank purchases totaled 40 tonnes year to date through April, with Turkey and Poland accounting for two-thirds of that activity. The WGC survey data, analyzed through a six-month post-survey window that the strategists view as more realistic for central bank visibility, points to a pickup in official-sector demand starting in the fourth quarter. Market signals reinforce the call: outflows from LBMA vaults and a pickup in UK gold exports suggest underlying demand is improving. A 20-tonne increase in vault holdings is consistent with export activity rising to about 61 tonnes, the strategists said, above the 53-tonne average observed since 2015 for this time of year.
Real Yields Set the Near-Term Floor
The opportunity cost of holding gold remains elevated. Societe Generale's economists expect 10-year US real yields to stay above 2 percent through the third quarter before declining gradually into year-end and into the first half of 2027. That trajectory underpins a neutral stance on gold over the summer, with scope for a more constructive outlook later in the year as the rate headwind eases.
Gold spot traded near $4,050 an ounce Monday, down about 27 percent from the all-time high of $5,595 set Jan. 29, according to LBMA data. The metal has shed roughly 9 percent over the past month as the Federal Reserve held its benchmark rate at 3.50 percent to 3.75 percent and Chair Kevin Warsh signaled a hawkish posture. The 200-day exponential moving average near $4,334 has capped recovery attempts, with the relative strength index hovering in the upper 30s — subdued but not yet at oversold levels that would signal a capitulation bottom.
Central Bank Demand vs. ETF Outflows
The structural bull case rests on continued official-sector accumulation. Central banks added 244 tonnes of gold in the first quarter of 2026, with Poland and China extending their buying streaks, according to WGC data. The latest central bank survey showed 84 percent of respondents expect gold to account for a larger share of global reserves over the next five years, and nearly 90 percent expect official holdings to increase over the next 12 months.
That strategic buying is being offset by tactical outflows. Gold-backed exchange-traded funds have seen substantial redemptions as rising real yields push rate-sensitive money out of the trade. Global gold ETF holdings are now about 1.5 percent below where they started the year, according to WGC data, reversing the inflows that helped push holdings to their highest since 2022. ING lowered its gold price forecasts last week, projecting an average of $4,300 an ounce in the third quarter and $4,600 in the fourth, down from previous estimates of $4,850 and $5,000.
The tug-of-war between patient official-sector buying and fast-money ETF redemptions will determine gold's path through the second half. A decisive break below $4,000 would test the structural bull case, while a soft inflation print in the May Personal Consumption Expenditures data due Thursday could provide the dovish catalyst needed to reclaim the $4,334 resistance.
This article is for informational purposes only and does not constitute investment advice.
