Goldman Sachs Revises Gold Forecast After Major Error in Central Bank Buying Estimates

Goldman Sachs (NYSE: GS) analysts have uncovered a critical flaw in their model for estimating central bank gold purchases, finding that previous estimates were understated by more than 70%. This correction has major implications for gold price direction in the second half of 2026.

Details of the Error

In a research note published on May 18, 2026, analysts Lina Thomas and Daan Struyven explained that the previous model significantly underestimated the volume of central bank gold buying. The revised estimates indicate that central banks purchased far larger quantities than previously thought.

Impact on Forecasts

This error implies that actual demand for gold was much stronger than assumed in earlier models. Consequently, price forecasts based on those models need adjustment. While the analysts did not provide an explicit new price target, they suggested the revision could support gold prices in the medium term.

Market Context

The correction comes amid gold price volatility driven by Federal Reserve monetary policy and geopolitical tensions. Gold prices had risen over 15% year-to-date as of the note's publication.

What This Means for Investors

Investors should watch for further updates from Goldman Sachs on the revised model. The significant error underscores the need for caution when relying on investment bank forecasts, especially in commodity markets influenced by opaque factors like central bank buying.