Metals Weekly: The formulaic price elasticity of central bank gold demand

Research evidence excerpt

Metals Weekly: The formulaic price elasticity of central bank gold demand

J P M O R G A N Global Markets Strategy

10 July 2026

Metals Weekly

The formulaic price elasticity of central bank gold

demand

Global Commodities Research

Gregory C. Shearer

(44-20) 7134-8161

gregory.c.shearer@jpmorgan.com

J.P. Morgan Securities plc

• Central banks have returned as net marginal buyers of gold since April, Ali(44-20)A. Ibrahim3493-6438

though buying has narrowed in breadth somewhat. ali.ibrahim@jpmorgan.com

• We do not think the long-term, structural motivations for increased EM J.P. Morgan Securities plc

central bank diversification into gold have changed and overall still see a Ananyashree Gupta

good amount of dry powder for additional elevated buying. (91-22) 6157 3627

ananyashree.gupta@jpmchase.com

• Recent central bank survey data indicates a continued strategic J.P. Morgan India Private Limited

diversification away from the USD and into gold, even with a majority of

responses coming after the start of the US/Iran conflict and gold’s roll-

over in price.

• Moreover, despite the multi-year push higher in prices inflating gold

shares, a significant portion of both EM and DM central banks still hold

less than a 10% share of gold.

• While we haven’t seen an eagerness yet from a broad swath of central

banks to significantly load up at lower prices, there have been two clear,

more emphatic official gold buyers accelerating purchases into this

pullback in prices: Poland & China.

• More broadly, targeting gold as a share of total reserves embeds a

formulaic, self-correcting elasticity. Lower gold prices erode existing gold

share and require more tonnes to reach a target percent.

• By our estimates, all else equal, the 14% fall in prices over the last quarter