Gold climbed to $4,424.44 an ounce on Wednesday, up 1.24% on the day, extending a run that has carried the metal 10.56% higher over the past month and 31.82% above where it traded a year ago. Silver moved with it, with September futures opening at $64.87 and spot prices pushing past $66.71 by late morning in New York.
The proximate trigger was softer expectations for July inflation. The more durable story is who has been buying underneath the tape all year.
The Official-Sector Bid
The People's Bank of China added 19.9 tons of gold in July, its largest monthly purchase since November 2023 and the 21st consecutive month of accumulation. Chinese reserves now stand at 76.08 million ounces, or roughly 2,366 tonnes.
The pace is accelerating rather than fading. June's purchase was 14.93 tonnes. The second quarter saw China add 33 tonnes overall, its largest quarterly increase since the fourth quarter of 2023, while the National Bank of Poland led all buyers with 51 tonnes.
This matters because central bank demand behaves differently from investor demand. Reserve managers are not trading a technical level or chasing momentum. They are rebalancing away from dollar exposure on multi-year timelines, and they tend to buy weakness rather than strength. That converts what would otherwise be ordinary corrections into shallower ones.
Where the Forecasts Diverge
The sell side is unusually split on what this is worth in price terms.
Goldman Sachs cut its year-end target to $4,900 from $5,400 on June 20, a $500 reduction driven by fading gold ETF inflows and the removal of remaining 2026 rate cuts from the firm's forecast. The bank still expects official-sector purchases to average 60 tonnes per month through 2026, citing what it called "strong underlying interest in gold."
J.P. Morgan is considerably more constructive, looking for $6,000 by year-end with $6,300 possible in 2027. Bank of America carries a 12-month target of $6,000.
The gap between $4,900 and $6,000 is not a disagreement about central bank behavior. Both camps expect the buying to continue. It is a disagreement about whether Western investment demand rejoins the trade or stays on the sidelines.
Silver's Separate Problem
Silver's 69.72% year-over-year gain outpaces gold's by a wide margin, and the driver is supply rather than reserve policy. The market is heading into its sixth consecutive annual deficit in 2026, with the World Silver Survey projecting a 46.3 million ounce shortfall. Since 2021, roughly 762 million ounces have been drawn from above-ground stocks to cover the gap.
Most silver is produced as a byproduct of gold, copper, and zinc mining, which means higher prices do not reliably call forth new supply. That structural feature is why silver's advances have been sharper than gold's in both directions.
For investors, the distinction is worth holding onto. Gold's bid is a policy decision being made in Beijing and Warsaw. Silver's is a mine-supply constraint that price alone cannot fix quickly.
Sources: Trading Economics (spot pricing), Caixin Global (PBOC reserve data), Kitco News (central bank purchases), Yahoo Finance (silver session pricing), World Silver Survey 2026 (supply deficit), Goldman Sachs, J.P. Morgan and Bank of America research notes as reported.