Goldman Sachs Gs Lifts Price Target On Gold As Rally Continues

Bonisiwe Shabane

-Dec 27, 2025, 8:48 PM

goldman sachs gs lifts price target on gold as rally continues

Gold continued its impressive rally in 2025, with Goldman Sachs this week revising its December 2026 price target to $4,900 per ounce, up from a previous forecast of $4,300. The investment bank cited solid flows into Western exchange-traded funds (ETFs) and sustained central bank buying as key drivers. As of early Tuesday at 10:37 A.M. (GMT+7), spot gold was trading at $3,968.32 an ounce after reaching a record $3,977.44 earlier in the day, reflecting a gain of approximately 51% since the start of the year. The continuing climb in gold prices has been fueled by several factors, including strong accumulation by central banks—particularly those in emerging markets—as they move to diversify their reserves. Goldman Sachs analysts expect this buying activity to average 80 metric tons in 2025 and 70 tons in 2026.

The bank also predicts that ETF allocations will likely expand, supported by an expected 100 basis point reduction in the U.S. Federal Reserve’s policy rate by mid-2026. They also estimated there is still considerable potential for further gains, noting that increased allocation to gold by private investors could propel ETF holdings above what would be implied by interest rates alone. Recent global political turbulence has also played a pivotal role in the surge. Market unease intensified after the U.S. federal operations entered a second week of shutdown, limiting investor access to key economic indicators and clouding the Federal Reserve’s policy outlook.

In a significant bullish declaration for the precious metals market, investment banking giant Goldman Sachs (NYSE: GS) has dramatically raised its gold price forecast, now predicting the yellow metal will hit an astounding $4,900... This upward revision, announced around October 6-7, 2025, comes as gold has already shattered historical ceilings, with spot prices recently topping the $4,000 per ounce threshold, signaling a robust and potentially sustained rally. The revised outlook from one of Wall Street's most influential firms underscores a growing institutional conviction in gold's enduring appeal as a safe-haven asset and a hedge against economic uncertainties. This move is poised to fuel further investor interest in gold, potentially driving capital into gold-backed instruments and mining equities, while also reflecting broader concerns about inflation, geopolitical stability, and the future trajectory of... Goldman Sachs' (NYSE: GS) decision to elevate its gold price target to $4,900 per ounce by December 2026 marks a substantial increase from its previous forecast of $4,300, representing a 14% jump in its... This revised projection, publicly reported around October 6-7, 2025, was made amidst a "breakneck rally" that saw spot gold touch an intraday high of $3,977.19 per ounce, with gold futures even surpassing the $4,000...

This historic surge has pushed gold's year-to-date gains in 2025 to approximately 51%, highlighting the intense upward momentum. The investment bank attributes its heightened confidence to a confluence of powerful and "sticky" drivers. Analysts, including Lina Thomas and Daan Struyven, point to persistent and robust inflows into Western gold-backed Exchange Traded Funds (ETFs) as a key factor, demonstrating sustained private investor interest. Even more impactful is the relentless buying spree by global central banks, particularly those in emerging markets, which are actively diversifying their reserves away from traditional assets. Goldman Sachs anticipates this central bank demand to remain significant, forecasting an average of 80 metric tons in 2025 and 70 tons in 2026. Another critical pillar supporting Goldman's bullish stance is the anticipation of substantial interest rate cuts by the U.S.

Federal Reserve. The firm projects a 100-basis-point reduction in the federal funds rate by mid-2026. Such a dovish shift in monetary policy would significantly lower real yields, thereby decreasing the opportunity cost of holding non-yielding assets like gold and enhancing its attractiveness to investors. Compounding these factors are ongoing geopolitical uncertainties and a weakening U.S. dollar, both of which traditionally bolster gold's safe-haven appeal. Goldman Sachs GS on Wednesday raised its end-2025 gold price forecast to $3,300 per ounce from $3,100, citing stronger-than-expected ETF inflows and sustained central bank demand.

Goldman Sachs also raised its forecast range to $3,250-$3,520 from $3,100-$3,300 earlier, according to its research note. The investment bank expects large Asian central banks to continue their aggressive gold purchases for the next three to six years, aiming to reach projected gold reserve targets. The bank raised demand assumptions by central banks to 70 tonnes a month from 50 tonnes earlier amid heightened U.S. policy uncertainty and on expectations that China may continue purchasing at rapid pace for another three to six years. "On the gold ETF side, our U.S. economists continue to expect two 25bp (basis points) Fed cuts in 2025 and one additional cut in H1 (first half of) 2026, which underpins our baseline for ETF inflows," Goldman Sachs said.

💎 Goldman Sachs is forecasting a sustained rally in gold prices, projecting a rise to $2,700 per ounce by the end of 2026, driven primarily by robust central bank demand and persistent geopolitical uncertainty,... This bullish outlook contrasts with the more tempered expectations prevalent earlier in the year, which were largely predicated on the anticipated trajectory of U.S. interest rates. While the narrative surrounding Federal Reserve policy remains significant, the investment bank now believes that factors beyond traditional macroeconomic indicators are exerting a more profound influence on gold's upward momentum. Central bank purchases, particularly from emerging market nations seeking to diversify reserves away from the U.S. dollar, have consistently exceeded expectations.

Data from the World Gold Council reveals that central banks acquired a record 1,037 tonnes of gold in 2022, and this trend continued into 2023, albeit at a slightly slower pace. This sustained demand provides a significant floor for gold prices, mitigating the downward pressure that might otherwise arise from rising real interest rates. Furthermore, ongoing geopolitical tensions, including the war in Ukraine and escalating tensions in the Middle East, are fueling safe-haven demand, further bolstering gold's appeal as a store of value. The bank also highlights the potential for increased retail investment in gold, particularly in Asia, as economic growth continues and disposable incomes rise. The current spot price of gold is hovering around $2,350 per ounce, reflecting a recent surge driven by weaker-than-expected U.S. inflation data and renewed expectations of Federal Reserve interest rate cuts later this year.

This price action has coincided with a slight weakening of the U.S. dollar, which typically moves inversely to gold. However, it's crucial to acknowledge that the gold market is not without its potential headwinds. A sharp and unexpected strengthening of the U.S. dollar, triggered by a more hawkish stance from the Federal Reserve, could exert significant downward pressure on prices. Similarly, a resolution of geopolitical conflicts, while positive for global stability, could diminish gold's safe-haven appeal.

From a regulatory perspective, increased scrutiny of gold-backed cryptocurrency tokens and exchange-traded funds (ETFs) could impact investor sentiment and trading volumes. The Securities and Exchange Commission (SEC) has been actively monitoring the crypto space, and any regulatory clampdown could indirectly affect the gold market. Beyond the immediate price drivers, longer-term structural factors also support a constructive outlook for gold. The increasing use of gold in technological applications, such as electronics and medical devices, is creating a new source of demand that is less sensitive to traditional macroeconomic cycles. Furthermore, the finite supply of gold, coupled with the increasing difficulty and cost of mining new deposits, suggests that supply constraints will continue to support prices in the long run. The environmental and social governance (ESG) considerations are also playing an increasing role in the mining sector, potentially leading to higher production costs and further limiting supply.

Investors should carefully consider these multifaceted factors when assessing the potential for gold to appreciate further in the coming years. While Goldman Sachs' $2,700 target represents a significant upside, the actual trajectory of gold prices will ultimately depend on the interplay of a complex web of economic, geopolitical, and regulatory forces. Goldman Sachs has just turned up the heat on their gold price predictions, eyeing a shiny new target of USD 4,900 per ounce by December 2026. This bold leap from the previous USD 4,300 forecast isn’t just a shot in the dark; it’s backed by solid gold reasoning. Strong demand from central banks, who are hoarding gold to diversify reserves and move away from the dollar, supports this optimistic outlook. Additionally, Goldman Sachs points to macroeconomic pressures, like inflation fears and geopolitical risks, which enhance gold’s allure as a safe haven.

They also note that the gold rally is driven more by structural demand than by speculative trading. With this upgrade, Goldman Sachs signals not just confidence in gold’s prospects but also anticipates potential market shifts that could further propel prices upward. Goldman Sachs Group Inc. (NYSE: GS) has revised its gold price forecast for December 2026 to a dazzling USD 4,900 per ounce, up from an earlier prediction of USD 4,300. This revision illustrates a growing confidence in the metal’s long-term value, spurred by robust demand from central banks and macroeconomic uncertainties. Firstly, the bank highlights the significant role of central banks in buoying gold prices.

These institutions are increasingly purchasing gold to diversify their reserves and reduce dependency on the dollar. Goldman Sachs expects central bank gold acquisitions to average 80 tonnes in 2025 and 70 tonnes in 2026. This strategic shift is a critical driver of the revised forecast and underscores the depth of institutional trust in gold’s enduring value. Moreover, Goldman Sachs identifies several macroeconomic and policy factors that are likely to sustain gold’s appeal. Concerns about inflation and the accommodative monetary policies, particularly in the U.S., make gold an attractive hedge. Geopolitical risks further push the demand for gold as a safe haven during turbulent times.

The bank also takes a conservative stance on the influence of speculative trading on gold prices. It emphasizes that the ongoing rally in gold prices is largely supported by structural demands from central banks and ETFs, rather than speculative flows. This suggests a more stable and sustained upward trajectory for gold prices, insulated from volatile speculative interests. Despite rallying 29% year-to-date and 47% since 2022, gold continues to reach new all-time highs, hitting $2,685 per troy ounce on Thursday. Goldman Sachs' Precious Metals analysts have revised their gold price forecast, increasing it from $2,700 to $2,900 per ounce for early 2025. This update is based on two main factors:

First, Goldman’s economists anticipate a faster decline in short-term interest rates in both the West and China. They recently highlighted that the gold market hasn’t fully priced in the positive impact of these rate cuts on Western ETF holdings backed by physical gold, which tends to occur gradually. Second, their updated nowcast shows that emerging market central bank purchases in the London over-the-counter (OTC) market continue to be a fundamental driver of the gold rally since 2022. Goldman expects these structural purchases to remain elevated. Goldman Sachs has extended its gold price forecast to $3,000 an ounce by mid-2026, up from the previous target.

The bank expects fewer cuts by the Federal Reserve. According to a recent Bloomberg report, gold prices are expected to set at $2,910 an ounce by the end of the year. Slower monetary easing in 2025 is seen as cutting demand for gold-backed exchange-traded funds (ETFs). Weak ETF inflows in December, partly due to a drop in uncertainty following the U.S. election, also created a lower baseline for gold prices in 2024, according to analysts Lina Thomas and Daan Struyven. “Conflicting factors have kept gold prices in a narrow range,” the analysts said.

They added higher central bank purchases have offset lower speculative buying. However, central bank purchases will be the key factor for prices, with expected monthly buying to average 38 tons through mid-2026. U.S. monetary easing, safe-haven buying, and robust central bank demand pushed gold soaring by 27% last year. However, the rally cooled off in November due to the dollar boost caused by Donald Trump’s election victory.

Goldman Sachs Gs Lifts Price Target On Gold As Rally Continues

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