Gold prices held steady near $4,694 per ounce on May 22, consolidating after a volatile stretch that saw the metal decline from a record high of $5,589 in January to the current range. The stabilization is supported by strong structural demand from central banks, with the World Gold Council reporting that official sector purchases totaled 244 tonnes in the first quarter of 2026 -- a robust pace that, while below the 1,000+ tonne annual buying of 2023-2025, remains well above pre-2022 historical averages.
Goldman Sachs recently raised its year-end 2026 gold forecast to $5,400 per ounce, citing continued central bank demand, sticky inflation, and geopolitical uncertainty related to the Iran conflict. The precious metal is up approximately 15% year-to-date even after the pullback from January's record, underscoring its role as both an inflation hedge and a safe-haven asset in the current macro environment.
What happened
The World Gold Council's Q1 2026 Gold Demand Trends report revealed that central banks purchased a net 244 tonnes during the quarter, continuing a pattern of reserve diversification that has been the dominant trend in the gold market since Russia's foreign reserves were frozen in 2022. Poland was the largest buyer, adding over 20 tonnes to its reserves. China's People's Bank of China added to its holdings for the 16th consecutive month, while India, Turkey, and Uzbekistan were also significant buyers.
The pullback from the $5,589 January record was driven by profit-taking and a sharp selloff in mid-May alongside the broader market dip. Gold fell alongside equities and other commodities on May 15, dropping 1.43% to $4,583 as the risk-off move bypassed traditional safe havens. However, the subsequent recovery to $4,694 suggests that structural demand from central banks and inflation-hedging investors is providing a floor.