Goldman Sachs estimates that central banks purchased 79 tonnes of gold in August, significantly higher than the pre-2022 average of 17 tonnes. China emerged as the largest identifiable buyer, acquiring 25 tonnes during the month.
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The estimates for official-sector gold buying rely on inferred flows due to the lag in International Monetary Fund (IMF) reporting, which often leads to many purchases going unreported. Consequently, revisions to these figures are common, and the actual total of purchases may be higher than what is publicly documented.
Analysts have noted a significant change in central bank accumulation patterns compared to the pre-2022 norm, attributing this shift to reserve diversification and hedging against sanctions, particularly after past instances of frozen reserve assets. This trend indicates that central bank buying is generally price-inelastic and recurring, acting as a consistent market support that mitigates price drops when speculative or ETF positions unwind. Historically, gold's marginal buyer has been tied to rate-sensitive investment demand, which contrasts with the current dynamics.
China's role as the largest identifiable buyer aligns with previous trends where reported pauses in its gold accumulation have coincided with price stabilization before resuming purchases. Going forward, interests include monitoring the official monthly reserve disclosures and whether purchases remain elevated at higher prices, which would affirm the inelastic nature of demand. The ongoing confidence in this structural support thesis depends on the observed patterns continuing through price increases.