China's Secret Gold Play Fuels Goldman's $4,900 Target

Goldman Sachs predicts a pronounced wave of central-bank gold buying into November—raising its estimate to 64 tonnes in September from 21 tonnes in August—and sees strong, continuing purchases through year-end driven largely by emerging-market reserve managers; the World Gold Council notes as little as one-third of such buying is reported to the IMF, down sharply from four years ago. Analysts say China is likely the biggest hidden buyer (Société Générale estimates as much as ~250 tonnes this year based on trade flows), and the opacity of disclosed data has forced market participants to rely on indirect measures while also limiting price transparency and raising the risk of front-running in an increasingly illiquid physical market (LBMA settlement times have stretched). With sustained clandestine central-bank demand and tight supply, Goldman projects gold toward $4,900 in 2026, a backdrop that has helped SPDR Gold Trust (GLD) rally c.51% YTD and implies ongoing upside pressure on prices if these flows persist.

Analysis

Goldman Sachs projects a pronounced wave of central-bank gold purchases into November, upgrading its estimate to 64 tonnes in September from 21 tonnes in August and forecasting sustained buying through year-end driven largely by emerging-market reserve managers. The World Gold Council warns that only about one-third of global central-bank buying is reported to the IMF—down from roughly 90% four years ago—introducing substantial opacity into official demand statistics.

China is a focal point for hidden accumulation: official monthly disclosures show 1.9t in July and August and 2.2t in June, but Société Générale’s trade-flow analysis suggests China could amass as much as ~250 tonnes this year, and market participants increasingly rely on indirect measures such as newly cast 400-ounce bar shipments and gaps in production/import/inventory data. Comments from market participants underscore deliberate underreporting to avoid political scrutiny and front-running.

The physical market is tightening: LBMA delivery timelines have stretched to as long as eight weeks, and SPDR Gold Trust (GLD) is up ~51.4% YTD, supporting Goldman’s view that constrained supply plus central-bank demand could drive prices toward a $4,900 2026 target. These dynamics point to continued upside pressure but elevated execution, liquidity and transparency risks that could amplify volatility and basis moves between paper and physical markets.

Key Decisions for Investors

• Consider increasing tactical exposure to gold via liquid ETFs like GLD to capture potential upside from continued central-bank buying and Goldman Sachs’ $4,900 2026 target, but scale into positions rather than committing full allocation at current levels
• Monitor indirect supply and demand indicators—Chinese trade flows, shipments of 400-oz bars through London, discrepancies in production/import/inventory data, and LBMA delivery times—as triggers to add to or trim positions
• Avoid large outright physical allocations without staged execution or hedging because extended LBMA settlement (up to eight weeks) and opaque central-bank flows increase execution and basis risk, and consider using options or futures to manage downside risk
• Track disclosure trends to the IMF and geopolitical/policy signals from major emerging-market central banks; reduce exposure if reported flows materially decelerate or if transparency improves in a way that could reverse current market asymmetries