Gold Breaks Above $4,600 as Options Flows Join Central Banks and ETFs

Gold prices have broken above $4,600 per ounce after months of resistance, and Goldman Sachs believes this breakout is not just driven by central banks, ETFs, and physical buying but also by options flows.

The investment bank's trading desk has observed a significant increase in demand for gold call options, with the gap between open interest in gold call and put options widening rapidly. This indicates that investors are using gold call options to hedge global macro and policy risks.

Goldman Sachs' analysts believe that dealer hedging could act as a short-term amplifier after the breakout, pushing prices higher if ETF inflows continue and call option positioning remains elevated.

The bank's current forecast of $4,900 per ounce by end-2026 has not yet factored in a surge in macro policy hedging demand, leaving room for further upside. However, Goldman Sachs also notes that this mechanism can amplify both upside moves and pullbacks, and if inflation reaccelerates and lifts rate hike expectations, dealer unwinding could add extra selling pressure.

China's cumulative non-monetary gold imports in 2026 are tracking well ahead of the same period in 2025, with physical demand continuing to support gold prices. Central bank demand remains a key pillar of Goldman Sachs' long-term gold thesis, but official data tends to be reported with a lag and cannot reflect actual purchases in real time.