- Goldman Sachs predicts China's massive gold purchases could push the price of an ounce of gold up to $3,000 by the end of 2025.
- Central banks around the world purchased 64 tons of gold in October, with China officially purchasing the most at around 55 tons – a number believed to be 10 times less than the actual amount.
- The vast majority of the world's central banks – 81 percent – are expected to increase their gold holdings in the next year, and no banks anticipate selling their gold reserves.
- Officially reported Chinese gold reserve holdings increased to 72.96 million troy ounces by the end of November.
- Gold demand around the world is fueled by a need to diversify assets amid geopolitical tensions and concerns over foreign currency reserves that could be frozen by adversarial nations.
The price of an ounce of gold could reach $3,000 by the end of 2025, driven by the People's Bank of China's massive gold purchases and global monetary easing.
This is according to a prediction made by Goldman Sachs precious metals analyst Lina Thomas, who supported her prediction with recent data showing a surge in gold buying not just by the PBOC but by other central banks. (Related: Gold and silver hit record highs amid geopolitical tensions and Fed rate cuts.)
Central banks purchased 64 tons of gold in October, significantly higher than the average of 17 tons before 2022. China emerged as the largest buyer, purchasing 55 tons, despite reporting only five tons to the public. This suggests that China's actual gold purchases are ten times higher than officially acknowledged.
Goldman Sachs notes that 81 percent of central banks surveyed by the World Gold Council expect global central bank gold holdings to rise in the next 12 months, with none expecting a decline.
China resumes gold purchases after short pause
The PBOC resumed its massive streak of gold purchases in November following a short hiatus. Official data from the PBOC showed that gold holdings increased to 72.96 million fine troy ounces at the end of November, up from 72.80 million troy ounces a month earlier.
The PBOC is the world's largest official sector buyer of gold – a title the communist bank has held since 2023. The gold purchases are expected to support demand for precious metals by Chinese investors.
However, the value of China's gold reserves fell to $193.43 billion at the end of November from $199.06 billion at the end of October, reflecting a decline in gold prices during the month.
Gold prices dropped in November for the first time since June, driven by a short wave of sell-offs following President-elect Donald Trump's victory in the November election.
Spot prices for gold are down five percent since hitting a record high of $2,790.15 an ounce on Oct. 31 but remain up 28 percent for the year.
Gold purchases driven by demand for asset diversification amid growing geopolitical tensions
The surge in central bank gold purchases, particularly by China, is driven by a combination of financial and geopolitical factors. Goldman Sachs highlights that since the global financial crisis, many emerging market central banks have sought to diversify their reserves, viewing gold as a financial hedge. Geopolitical sanctions, particularly the freezing of central bank assets, have also played a crucial role.
The freezing of Russian central bank assets in 2022 marked a turning point, prompting many emerging market central banks to rethink what is considered risk-free. Following the freeze, purchases by central banks and other institutions in the London over-the-counter market surged fivefold. In China, prominent economists have emphasized the necessity of diversifying foreign exchange reserves to mitigate potential U.S. sanctions.
Watch this report from "Augusta Precious Metals" as Devlyn Steele discusses Goldman Sachs' prediction that gold prices could surge as high as $3,150 per ounce.
This video is from the Gold & Silver Central channel on Brighteon.com.
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