Gold prices slid to around $4,084 per ounce on Thursday, October 22, despite new data from Goldman Sachs showing that central banks purchased 79 tonnes of gold in August—more than four times their usual monthly amount.
Central banks accelerate gold accumulation
Goldman Sachs research published in October indicates that central bank gold acquisitions reached 79 metric tonnes last August, up from 44 tonnes in July.
This figure is about 4.6 times higher than the monthly average of 17 tonnes recorded before 2022. Among central banks, China emerged as the largest identifiable buyer, with 25 tonnes added to its reserves.
However, the World Gold Council reported only 39 tonnes in net official-sector gold purchases for the same month. The gap between these numbers stems from Goldman’s statistical model, which accounts for undisclosed activity that goes beyond what individual central banks and the International Monetary Fund have reported.
This robust purchasing trend by official institutions underscores their ongoing drive to diversify reserves away from traditional government bonds and major currencies.
Some countries are also reconsidering the locations where their gold is stored, but simply shifting bullion between vaults does not contribute to fresh demand.
Goldman Sachs’ analysis reinforces the trend of central banks increasingly seeking to diversify their reserves, with purchases in August far above historical averages.
Higher oil prices and Fed outlook pressure gold
The latest pullback in gold prices comes amid growing expectations that persistent inflation could keep U.S. interest rates elevated longer than previously anticipated.
Brent crude recently surged past $112 per barrel after fresh attacks on Saudi energy infrastructure, fueling concerns that energy costs could add to inflationary pressures.
Rising Treasury yields make government bonds more attractive compared to gold, which does not pay interest, further weighing on bullion prices.
The market downturn follows commentary from Peter Schiff, who saw gold near $4,145 as a buying opportunity despite a tough macroeconomic backdrop. Coinpaper also noted that surging oil prices have intensified speculation about further Federal Reserve rate hikes, adding pressure to the gold market.
With another Federal Reserve meeting scheduled for October 27-28, investors are bracing for signals on whether policymakers intend to continue tightening monetary policy.
In this climate, where market sentiment can shift dramatically on the outcome of a single Fed announcement or by the sudden addition of a major altcoin on an exchange, traders are turning to tools like CryptoAppsy. This privacy-focused solution helps investors monitor real-time charts, set personalized price alerts, access timely coin news, and track key macroeconomic indicators—all consolidated on one screen without requiring account creation.
Technical levels and price forecasts
Gold’s short-term technical picture remains weak. Reuters technical analysts have flagged $4,073 as the next key support, with resistance located near $4,135.
A sustained move above $4,135 could set the stage for a rebound toward the $4,150–$4,169 range and possibly the key $4,200 level. Conversely, if gold breaks decisively below $4,073, the risk of a slide to $4,000 rises.
Looking ahead, Goldman Sachs maintains its year-end gold price target at $4,900. This outlook is underpinned by expectations of ongoing central bank purchases and strengthening private investment interest.
Goldman Sachs anticipates that ongoing reserve diversification will provide long-term structural support for gold prices, despite current headwinds from monetary policy.
To rise from $4,084 to $4,900, gold would need to gain roughly 20%, representing a sizable increase under current monetary dynamics.
While central bank accumulation remains a critical factor in the broader support for gold, near-term trends remain at the mercy of U.S. rate policy and inflation outlooks. Analysts indicate that this dynamic will likely dictate price action in the coming weeks.
