Gold's Divergent Fortunes: Bank Forecasts Tumble While Central Banks Keep Buying
Published on 08/16/2026 at 08:51 | Redaktion boerse-global.de
The gold market is telling two very different stories at once. On one side, a chorus of major international banks has trimmed price forecasts, with projections ranging from $4,300 to $5,600 per ounce. On the other, the People's Bank of China just extended its buying streak to a 21st consecutive month, adding roughly 20 tonnes of bullion in July alone. That tension between institutional skepticism and official-sector appetite is now the defining feature of the market.
Friday's session captured the mood neatly. Gold slipped below $4,350 during the day as traders locked in profits, though the metal still closed at $4,432 — up 0.6 percent on the day and 0.7 percent for the week. Over the past 30 days, bullion has gained 9.0 percent, a solid rebound from the August trough of $3,310.10, which now sits 34 percent below current levels. The distance back to the 52-week high of $5,586.20, set in late January, remains a substantial 21 percent.
The recent run-up traces back to Washington, where softer-than-expected US producer price data for July — driven by lower energy and food costs — has reshaped the Federal Reserve calculus. Core producer prices also rose less than forecast, and markets have responded by pricing in only a 35 percent probability of a September rate hike, down sharply from 55 percent just a week earlier. For a non-yielding asset like gold, reduced pressure on the Fed to tighten is generally supportive. But Friday's profit-taking serves as a reminder that favorable macro news doesn't automatically translate into immediate gains.
The bank forecast revisions add another layer of complexity. Commerzbank now sees gold at $4,800 by the end of 2026, while Citigroup projects a pullback to $4,300 over the next zero-to-three months. JPMorgan's 2026 average estimate sits at $5,243, Morgan Stanley sees $5,200 for the second half, and ANZ remains the most bullish at $5,600 by year-end. The wide dispersion underscores just how divided the sell-side has become following the retreat from January's record.
Should investors sell immediately? Or is it worth buying Gold?
Geopolitical risk continues to underpin the market's floor. Diplomatic efforts to reopen the Strait of Hormuz have stalled, keeping investors on edge — any escalation could push energy prices higher and reignite inflation pressures. That uncertainty bolsters gold's safe-haven appeal even as it injects volatility. Oil is heading for a weekly gain as traders monitor US-Iran negotiations.
The structural picture, meanwhile, remains robust on the official side. Globally, central banks purchased roughly 289 tonnes of gold in the second quarter, a 62 percent jump year-on-year, according to data consistent with World Gold Council figures. Goldman Sachs estimates official-sector buying is currently running at about 60 tonnes per month worldwide. The People's Bank of China alone added 19.9 tonnes in July, following May's increase of 0.32 million ounces that brought its total reserves to 74.96 million ounces.
Yet beneath those headline numbers, demand is bifurcating sharply. Strong central bank purchases and healthy over-the-counter activity stand in contrast to persistent outflows from gold ETFs and continued weakness in the jewelry sector. Nowhere is that shift more visible than in China, where retail sentiment has cooled dramatically. In Beijing, gold jewelry prices have dropped by more than 300 yuan per gram to between 1,340 and 1,370 yuan, and dealer Beijing Caibai reports investment-bar demand has fallen by roughly 60 percent. Private buyers and jewelry consumers are pulling back even as the central bank accumulates.
Gold at a turning point? This analysis reveals what investors need to know now.
Looking ahead, two factors will likely dominate: fresh US economic data and any progress on Hormuz negotiations. Both will determine whether the recent shift in rate expectations holds. On the demand side, the question is whether second-quarter central bank buying persists. The World Gold Council expects investment to remain the primary growth driver in the second half, with additional support from the OTC market and Asia — even as the retail segment in China suggests the market's center of gravity is moving decisively toward state-led reserve accumulation.
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