Key takeaways
- Goldman estimates central banks bought 79 tonnes in August
- Gold falls to $4,084 despite sustained official demand
- Fed policy could determine the next major price move
Gold prices dropped to approximately $4,084 per ounce on Thursday, October 22, even as new Goldman Sachs research suggested central banks purchased 79 tonnes of bullion in August, more than four times their historical monthly average.
Spot gold fell 1.4% to $4,084.25, reaching its lowest level in more than two months as rising oil prices reinforced expectations that the Federal Reserve could keep interest rates elevated.
Central Banks Buy Gold at Nearly Five Times Their Historical Pace
Goldman Sachs estimates central banks acquired 79 metric tonnes of gold in August, compared with approximately 44 tonnes in July.
According to the bank's October research, purchases were roughly 4.6 times the pre-2022 monthly average of 17 tonnes. China was the largest identifiable buyer, accounting for an estimated 25 tonnes.
However, the World Gold Council recorded only 39 tonnes in reported net purchases during August.
The difference reflects Goldman's statistical estimate of official-sector activity versus purchases disclosed to the World Gold Council through central banks and the International Monetary Fund.
Goldman's findings reinforce the longer-term central bank accumulation trend, with official institutions seeking to diversify their reserves away from traditional currencies and government bonds.
Countries are also reconsidering where their gold is stored, although transferring existing reserves between vaults does not necessarily create additional demand.
Why Gold Is Falling Despite Strong Central Bank Demand
Gold's latest decline reflects growing concerns that inflation will keep U.S. interest rates higher for longer.
Brent crude surged above $112 per barrel following renewed attacks on Saudi energy infrastructure, increasing fears that expensive energy could prolong inflation.
Higher interest rates make Treasury bonds more attractive relative to gold, which generates no interest income.
The pressure follows a period when Peter Schiff called gold near $4,145 a buying opportunity despite inflation and monetary tightening.
More recently, Coinpaper reported how rising oil prices increased Fed rate-hike expectations, contributing to bullion's decline.
The October 27-28 Federal Reserve meeting could provide another catalyst, particularly if policymakers signal that further tightening remains necessary.
Gold Price Prediction: Could XAU/USD Recover Toward $4,900?
The immediate technical picture remains weak, with Reuters technical analysis identifying support near $4,073 and resistance around $4,135.
A sustained move above $4,135 could improve the recovery outlook toward $4,150–$4,169, followed by the psychological $4,200 level.
Conversely, a decisive break below $4,073 would increase the risk of testing $4,000.
Goldman Sachs maintains a published $4,900 year-end price forecast, supported by expectations of sustained central bank purchases and improving private investor demand.
As Coinpaper's earlier Goldman forecast analysis explained, the bank expects reserve diversification to provide structural support over time.
From $4,084, reaching $4,900 would require approximately 20% appreciation, a substantial recovery given current monetary conditions.
For now, the Federal Reserve's interest-rate outlook remains the more immediate market driver. Central bank accumulation could support bullion over the longer term, but it does not guarantee that gold has reached its bottom.
