State Street Reaffirms $5,000 Gold Target Amid Central Bank Buying Activity

State Street Investment Management has reaffirmed its $5,000 price target for gold by early 2027, despite a significant drop in spot gold prices in June. The firm's Monthly Gold Monitor notes that central banks continue to accumulate gold reserves, with global net purchases reaching 244 tons in the first quarter of 2026.

This represents a 17% increase quarter-over-quarter and a 3% year-over-year rise above the five-year quarterly average, according to data from the World Gold Council. State Street forecasts that central bank net gold purchases for the full year of 2026 will range between 680 and 820 tons.

The firm attributes its bullish outlook on gold to several factors, including global debt pressures, physical demand in China, and central bank buying activity. While interest rate dynamics have shifted against gold, with expectations of Fed rate hikes and rising real yields, State Street notes that this has not altered the most important buying structure for gold over the past few years.

The report also highlights the changing reserve asset landscape, with gold's share in global official reserves rising to approximately 27% by the end of 2025, surpassing U.S. Treasuries at 22% for the first time. This shift is driven by central bank allocations and physical demand from Asia.

State Street acknowledges that a short-term downward move is possible, with strong support for gold prices in the $3,750-$4,000 range. However, it maintains its target of $5,000 per ounce by early 2027, citing the continued stability of central bank buying activity and global debt pressures.