Key Takeaways
A UBS report projects central bank net gold purchases will reach 800 to 850 metric tons in 2026, countering recent market fears that a 15-year trend of accumulation was ending.
"The possibility of a structural shift toward large-scale gold sales by central banks is extremely low," Joni Teves, a strategist at UBS, wrote in the April 2 report. The bank maintained its year-end 2026 price target of $5,600 per ounce.
The analysis directly addresses recent headlines about Turkey's central bank selling approximately 50 tons of gold, which had sparked concern over a potential trend reversal. UBS argues this data is likely distorted by commercial bank positions and swap operations, advising against drawing broad conclusions until more detailed data is available. The projected 800-850 ton purchase volume for 2026, while slightly below the estimated 860 tons for 2025, represents a firm continuation of the buying trend seen over the past decade and a half, where official sector purchases have provided consistent support for the market.
This official sector behavior reinforces the view that central banks act as long-term, strategic holders rather than short-term traders. According to a 2025 World Bank survey, approximately 62% of central banks primarily use a "buy-and-hold" strategy for their gold reserves. Only about 4.5% engage in short-term tactical adjustments. The primary motivation for more than half of these institutions to increase gold holdings is diversification, a factor that remains firmly in place amid persistent geopolitical tensions and macroeconomic uncertainty.
UBS suggests that central banks often act as a stabilizing force, using price pullbacks to build positions rather than chasing rallies. This behavior explains why official sector buying can seem to disappear during periods of high price volatility. For investors, the report suggests that price dips should be viewed as "strategic buying windows" rather than signals of a trend ending. The long-term drivers for gold, including risks to the global growth-inflation mix and sustained geopolitical tensions, continue to make it a key asset for portfolio diversification.
This article is for informational purposes only and does not constitute investment advice.
