The gold market has already risen to new record highs this year – and Goldman Sachs believes that the rise is not yet over. The US investment bank sees gold at $4,900 per ounce by the end of 2026. This development is expected to be driven primarily by continued purchases by central banks and further inflows into gold-backed ETFs. Additional impetus could come if private investors also increasingly rely on gold for diversification.
Goldman Sachs remains significantly optimistic about gold
Speaking to Bloomberg TV, Goldman Sachs emphasized that they are “as optimistic as ever” about gold. The bank expects a further price increase of almost 20 percent by the end of 2026 and sees the gold price at $4,900 per ounce. Compared to the current year, in which gold has temporarily gained almost 60 percent, the house expects a more moderate pace, but unchanged strong fundamental drivers.
These drivers are essentially the same as in the current year 2025: structurally higher gold purchases by central banks and a beginning interest rate cut cycle by the US Federal Reserve, which could make gold as a non-interest-bearing asset relatively more attractive compared to bonds. Goldman Sachs economists expect the Federal Reserve to cut its key interest rates by a total of around 75 to 100 basis points by mid-2026.
Goldman Sachs attributes the fact that gold has held up well despite the temporary strength of the US dollar to these stable sources of demand. While the dollar remains an important factor, the role of gold as a strategic store of value has changed in recent years and is gaining further importance, especially in the institutional sector.
Gold in the focus of central banks – reaction to frozen reserves
A central role in Goldman Sachs’ gold story is played by the behavior of central banks. At the latest since the freezing of Russian foreign exchange reserves in 2022, the perception of currency reserves has shifted in many central banks, especially in emerging markets. The analysts point out that gold is the only reserve asset that – if stored in its own territory – is not dependent on sanctions or third parties.
In this context, Goldman Sachs expects central bank purchases of gold to remain at an elevated level. The bank forecasts average net purchases of around 80 tons per quarter for 2025 and around 70 tons for 2026. In particular, reserve managers in emerging markets are expected to continue to diversify their holdings away from US dollar investments towards gold.
This sustained demand has already contributed significantly to gold recording a strong upward movement in 2025. Goldman Sachs emphasizes that gold is thus increasingly understood as a strategic reserve component – less as a purely tactical instrument for times of crisis, but as a permanent building block in the reserve mix of central banks.
Gold and ETFs: small market with great leverage
In addition to central banks, Goldman Sachs sees gold supported primarily by the ETF market. Gold ETFs enable institutional and private investors to hold gold in standardized, exchange-traded form. The experts point out that the market for gold ETFs is relatively small compared to other asset classes: the volume of global gold ETFs is about 70 times smaller than the value of the US Treasury market.
According to Goldman Sachs, this size ratio creates a potentially strong leverage effect. Even a comparatively small reallocation amount from global bond markets into gold could significantly increase demand and thus have a noticeable impact on the gold price. The bank expects ETF holdings in the West to increase as the Fed cuts its key interest rates and real yields fall.
Currently, ETF inflows have returned to a level that fits well with interest rate expectations after a sharp increase in September, according to the analysts. From Goldman Sachs’ point of view, this indicates that it is not an exaggeration, but a reallocation supported by the macroeconomic situation.
Gold as a diversification component for the private sector
According to Goldman Sachs, another factor that has not yet been fully exploited is diversification by private investors. So far, the “de-dollarization” and diversification theme has been driven primarily by central banks. If this behavior were to extend to the private sector – for example, to large institutional investors, family offices or wealthy private investors – this could mean additional impetus for gold.
The US bank argues that gold still accounts for only a small proportion of many portfolios. In view of increasing discussions about national debt, fiscal risks and the independence of central banks, gold could become more of a focus as a hedging instrument. Even a small percentage reallocation from bonds or other interest-bearing securities into gold could trigger noticeable price sensitivity due to the relative market size.
Gold currently occupies a top position in Goldman Sachs’ commodity recommendations. The bank sees the precious metal as an investment that offers upside potential in the base scenario and could additionally benefit in stress scenarios – for example, if there are growing doubts about fiscal sustainability or monetary policy orientation.
Goldman Sachs remains upwardly oriented in its gold forecast
As early as the beginning of October, Goldman Sachs raised its gold forecast for 2026 from $4,300 to $4,900 per ounce. The decisive factors for this were the strong inflows into Western gold ETFs, the strong demand from central banks and the assessment that these trends will continue in the coming years.
The analysts emphasize that the risks for their own gold forecast are generally skewed to the upside. Should private diversification be stronger than currently assumed in the base scenario, ETF holdings could exceed the level derived from the interest rate models. In such a case, a gold price above the current forecast could not be ruled out.
In any case, one thing is certain for Goldman Sachs: From the bank’s point of view, gold remains a central asset in the commodity sector, whose role as a strategic store of value is more likely to be strengthened than weakened by the current macroeconomic and geopolitical conditions.
