Gold's biggest buyers aren't slowing down, but SocGen sees a more measured pace ahead

This year, a record 79 central banks participated in the World Gold Council’s survey. Among respondents, 89% of reserve managers expect global central bank gold holdings to increase over the next 12 months, while a record 45% expect their own institutions to add to their reserves, up from 43% in 2025.

Despite this bullish sentiment, commodity analysts at Société Générale said that ongoing uncertainty in the Middle East and disruptions to global energy markets have created significant headwinds for central bank reserve managers.

The French bank's analysts said that until the conflict is resolved and energy markets stabilize, central banks are likely to focus on priorities other than buying physical gold.

However, they added that even in this uncertain environment, there is still scope for central banks to increase their gold purchases.

To gain a clearer picture of central bank gold demand relative to the survey results, SocGen said it prefers to evaluate respondents' intentions over a six-month time frame rather than a full year.

“As with any asset allocator, central banks typically have reasonable visibility over portfolio positioning in the near term, but far less over a full year. In this context, stated intentions should carry greater informational value over shorter horizons,” the analysts said.

Using this methodology, the analysts said they expect central banks to purchase between 100 and 120 tonnes of gold over the remainder of the year.

“This is roughly double the volume recorded in the first four months and aligns with our broader call for a resumption in central bank buying,” the analysts said.

SocGen explained that its current forecast also aligns with UK trade data and vault data from the London Bullion Market Association.

“The [trade data] point to a clear acceleration in export activity. Total UK gold exports reached 35 tonnes in April, up from 13 tonnes in March. However, this remains below the historical benchmarks of 47 tonnes for April since 2022 and 53 tonnes since 2015. China continues to dominate flows, accounting for the bulk of shipments. Exports to China totalled 25 tonnes in April, well above both the 17-tonne April average since 2022 and the 13-tonne average since 2015,” the analysts said.

At the same time, LBMA vault holdings are consistent with a pickup in export activity, signaling a meaningful improvement in underlying central bank demand.

Although central bank demand is expected to remain resilient through the rest of the year, SocGen said investment demand will continue to be driven primarily by the opportunity cost of holding the precious metal.

“Our economists’ central scenario sees 10Y US real yields remaining above 2% through Q3, before declining gradually into year-end and into H1 2027. This underpins a neutral stance over the summer, with scope for a more constructive outlook later in the year as the opportunity cost of holding gold begins to ease,” the analysts said.