Gold Near US$4,000 as Central Banks Buy and ETF Investors Sell

A precious metals symposium at the FT Metals and Mining Summit in London on 14 October 2026 drew producers, fund managers and bank researchers to weigh up where gold goes next. Endeavour Mining CEO Ian Cockerill was among the speakers.

The timing gave the debate an edge. Gold settled near US$4,112 per ounce on the day, roughly 27% below its January 2026 high of US$5,608.

Much of the discussion turned on two buyers who behave very differently: investors, who can move quickly in either direction, and central banks, which accumulate slowly and strategically. Limited mine supply sits beneath both. Cockerill said he did not know whether US$4,000 was the floor, but he thought the market was close to a low.

The question for anyone holding bullion or mining shares is which buyer group is likely to set the floor and which one drives the fast moves. That distinction shapes how you should read the recent fall.

What did the summit say about who is buying gold now?

According to FT coverage reported by Seoul Economic Daily and Asiae, Cockerill pointed to macroeconomic instability, fading confidence in fiat currencies and central banks’ efforts to defend their currencies as the forces supporting gold. Fiat currencies are government-issued money not backed by a physical commodity.

Ian Cockerill on the US$4,000 level Cockerill said he did not know if US$4,000/oz was the floor, but believed it was close to a low ahead of another upward phase.

Others in the room leaned the same way. Charlotte Young, fund manager at Troy Asset Management, said gold could set a new record within 12-18 months. Suki Cooper, global head of commodities research at Standard Chartered, said central-bank demand remained strong.

The numbers show those two buyer groups pulling in opposite directions. World Gold Council (WGC) data for Q2 2026 recorded exchange-traded fund (ETF) outflows of 44.8 tonnes, meaning investors sold listed funds that hold physical gold. In the same quarter, central banks bought 288.9 tonnes, up 62% year on year and more than five times their Q1 total.

ETF outflows tend to accelerate when rate expectations rise, because investors holding listed gold funds weigh the metal’s lack of yield against what cash and bonds now pay.

Official buying has kept going since. Central banks bought about 345 tonnes in H1 2026, and preliminary FT figures put September purchases near 63 tonnes, the highest monthly total since November 2024. Goldman Sachs forecasts buying of about 60 tonnes a month, while WGC’s Shaokai Fan said new buyers such as Guatemala, Indonesia and Malaysia have begun or resumed purchases. Total H1 demand reached 2,522 tonnes, up 2%, at a record value of US$380 billion.

If central banks keep buying while ETF investors sell, you can read official demand as the part of the market least likely to leave when sentiment turns.

Why limited supply is part of the bull case, and what it does for miners

That steady official bid is landing on a market that cannot add much metal. Gold rallied to records in a matter of months. The supply response barely moved.

• Mine output: 3,672 tonnes in 2025, up just 1%, and a record 885 tonnes in Q1 2026 (+2%)
• Recycling: 1,404 tonnes in 2025, up 2% and the highest since 2012
• New discoveries: S&P Global sees output peaking near 110 million oz in 2026 and easing toward 103 million oz by 2028

Total 2025 supply reached 5,002 tonnes, yet even record prices drew out only a moderate lift in recycling.

The lead-time problem S&P Global puts discovery-to-production at 15.2 years for gold mines, and about 17.9 years for mines that entered production in 2020-23.

A price signal sent today may produce new ounces in the 2040s. Because supply cannot respond quickly, you should expect demand shocks to hit the price harder than they would in a market that can add ounces.

Because the structural supply imbalance rests on geology and permitting rather than price, even a sustained rally cannot quickly bring new ounces to market, which is why demand shocks carry so much weight.

What higher prices do to miner margins

For producers such as Endeavour, that rigid supply has a financial upside. Sprott points to operating leverage, where costs stay largely fixed, so a small rise in the gold price can produce a much larger rise in free cash flow. Franklin Templeton says miners’ earnings and free cash flow have been rising faster than bullion, backed by stronger balance sheets and higher shareholder returns.

Flat production also pushes companies toward mergers and acquisitions. Sprott says miners may need deals to replace depleted reserves, and cautions that construction spending and acquisitions could test capital discipline.

The same leverage cuts both ways. Equities can outperform bullion when prices rise, and they can fall harder when prices drop.

What could weaken gold demand from here?

The bull case sounds confident, but the price has already shed more than a quarter of its value since January. On 14 October, gold fell 1.19% on the day, 4.21% over a month and 2.30% year on year, according to Trading Economics.

Real yields are interest rates after inflation. When they rise, cash and bonds look more attractive than gold. The WGC also expects 2026 central-bank buying to fall below 2025’s 863 tonnes, and Reuters cited a figure of about 850 tonnes in March.

Real yields matter more than headline rates because they strip out inflation, and the gap between the two explains why gold can fall even when central banks keep buying.

The structural camp argues that reserve diversification, sanctions risk and de-dollarisation (countries reducing reliance on the US dollar) have permanently changed official behaviour. Central banks have been net buyers since 2010 and bought a record 1,136 tonnes in 2022 after Russia’s reserves were frozen. The cyclical camp says official buying could slow as prices climb, exposing how much of the rally rests on investor momentum. The WGC expects bargain hunting could limit declines beyond 10%.

You should treat these as two clocks running at different speeds. A drawdown does not by itself show the official-sector shift has ended. Three indicators will tell you which clock is winning:

1. Real yields
2. The US dollar
3. Monthly central-bank purchase totals

Reading the floor: what the summit debate leaves investors weighing

The picture from London is a market with a slow base and a fast fringe. Central banks supply the steady demand, investors supply the swings, and limited mine supply amplifies both, which in turn magnifies miners’ earnings in each direction.

The US$4,000 floor came from speakers’ views, including Cockerill’s and Young’s optimism, not from a guaranteed forecast. Before drawing conclusions, watch whether monthly official buying holds near recent levels and whether real yields and the dollar ease or tighten.

Institutional forecast models differ widely on the path from here, and the gap between bullish targets such as Young’s record call and more cautious views reflects different assumptions about Fed policy and official demand.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. Past performance does not guarantee future results, and forward-looking views are speculative and subject to change.