⦿ Executive Snapshot

• What: Goldman Sachs maintains a bullish target for Gold at $5,400 by year-end despite short-term weaknesses due to rising global yields.
• Who: Analysts Lina Thomas and Daan Struyven from Goldman Sachs, central banks, and the World Gold Council (WGC).
• Why it matters: Central bank purchases are expected to increase, supporting Gold prices amid geopolitical risks and inflation, highlighting Gold's role as a safe-haven asset.

⦿ Key Developments

• Central bank buying is expected to average 60 tonnes a month this year, up from a 12-month moving average of 50 tonnes.
• Gold reached an all-time high of around $5,600 per troy ounce at the end of January.
• In Q1, global central banks bought 244 tonnes of Gold, a 3% increase year-over-year, despite some selling activity.
• The People’s Bank of China purchased 8 tonnes of Gold in April, the highest level since December 2024.
• Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, the highest yearly purchase since records began.

⦿ Strategic Context

• Gold has historically been a store of value and is widely perceived as a safe-haven asset during economic turbulence, making it a key focus for central banks.
• The current macroeconomic environment, characterized by rising inflation and geopolitical risks, has renewed interest in diversifying reserves with Gold.

⦿ Strategic Implications

• Immediate market implications include potential upward pressure on Gold prices driven by increased central bank demand and geopolitical uncertainties.
• Long-term implications suggest that sustained high Gold prices may lead to greater institutional adoption and diversification strategies among central banks.

⦿ Risks & Constraints

• Regulatory risks could arise from changes in central bank policies regarding reserve management and Gold purchases.
• Competition from alternative safe-haven assets, such as the US Dollar and US Treasuries, may hinder Gold price appreciation.

⦿ Watchlist / Forward Signals

• Monitoring central bank purchase announcements and geopolitical developments will provide insights into Gold's future price movements.
• Key indicators will include inflation data and interest rate changes, as they directly impact investor sentiment towards Gold.