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Gold rebounded modestly and silver surged in early U.S. trading Wednesday, clawing back some losses from Tuesday’s sharp selloff. But the day’s technical bounce is overshadowed by a landmark Goldman Sachs report that rewrites the narrative for 2026 gold prices: the bank has corrected a critical flaw in its central bank purchase model, revealing sovereign buyers have been buying 72% more gold than previously estimated over the past eight months.
Spot gold traded at $4,503.70 an ounce, up 0.48%, while silver outperformed with a 2.71% gain to $75.675 an ounce. The relief rally came as Treasury yields pulled back from multi-year peaks: the 10-year yield fell 2.7 basis points to 4.64%, and the 30-year yield retreated after hitting its highest level since 2007. Oil prices also softened, with WTI sliding toward $102 a barrel and Brent toward $109.
The oil decline followed tentative diplomatic progress: U.S. officials said the Iran conflict could end “very quickly,” and three supertankers carrying 6 million barrels of crude attempted to transit the Strait of Hormuz—the largest single-day Gulf departure since hostilities began in February. Still, oil held above $100 a barrel, keeping inflation risks alive. Gold remains trapped in the “rate shock zone” triggered by last week’s inflation data, with the dollar hovering near a six-week high to cap gains.
In a May 18 note, analysts Lina Thomas and Daan Struyven admitted their central bank gold nowcast suffered from systematic bias. UK trade data has failed to track gold leaving London’s vaults since August 2025, leading to massive undercounting of sovereign purchases.
The bank revised its March 2026 purchase estimate to 50 tonnes from 29 tonnes—a 72% upward adjustment—with April buying now pegged at 80 tonnes. Goldman now projects full-year 2026 purchases will average 60 tonnes per month, or 720 tonnes annually, aligning with the World Gold Council’s 244-tonne first-quarter figure.
This revision is transformative because central bank demand operates on a fundamentally different timeline than investor flows. Sovereign buyers pursue long-term reserve diversification, are largely insensitive to short-term price swings, and do not liquidate for quarterly performance targets.
Goldman’s correction reveals a far stronger, more persistent buyer has been underpinning the market for nearly eight months. The People’s Bank of China added 8 tonnes in April—its largest purchase since December 2024—extending its 15-month buying streak. Emerging market central banks remain structurally underweight gold relative to developed peers, ensuring steady demand ahead. This unrecognized support explains gold’s resilience during recent pullbacks.
Goldman warned of near-term downside risks. A renewed escalation in the Strait of Hormuz would push oil higher, stoking inflation fears and Fed rate hike bets that could trigger private investor liquidations. Gold often serves as a liquidity source during market stress, and while ETFs saw 240,000 ounces of inflows in the week to May 15, that support could reverse rapidly if equities sell off.
Nonetheless, the bank reaffirmed its January 2026 year-end target of $5,400 an ounce.
Wednesday’s rebound is merely a temporary reprieve from rate pressures. The real catalyst for gold’s second-half trajectory is Goldman’s revelation that the market’s structural floor is far stronger than anyone realized—a signal that will outweigh daily price swings for long-term investors.
