Gold: Central bank flows and real yields – Societe Generale

Societe Generale strategists Michael Haigh and Jeremy Sellem examine World Gold Council (WGC) survey data and market flows to gauge central bank demand for Gold. The authors refine survey interpretation, infer 100–120 tonnes of additional buying in 2026, track UK exports and LBMA vault data, and link Gold prices closely to US real yields, supporting a neutral near-term stance that turns more constructive into 2027.

Survey intentions versus actual demand

"In this week’s CCA, we analyse the latest World Gold Council (WGC) central bank survey, with a focus on gold buying intentions. Year to date, net central bank purchases have been modest at +40t and highly concentrated with Turkey and Poland accounting for two-thirds of total activity. In our latest outlook we highlighted a likely resumption of visible central bank buying from Q4 2026."

"We therefore refocus the analysis on a six-month post-survey window, which we view as more realistic. 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."

"Applying this framework to the 2026 survey across both questions, and using the regression estimates, implies additional purchases of c. 100–120 tonnes 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. Our conviction is reinforced by market signals, notably outflows from LBMA vaults and a pickup in UK gold exports."

"Using our simple regression framework, a 20‑tonne increase in vault holdings is consistent with a pickup in export activity to around 61 tonnes. While this remains slightly below the post‑2022 average of 73 tonnes, it exceeds the 53‑tonne average observed since 2015 for this time of year, signalling a meaningful improvement in underlying central bank demand."

"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."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)