Goldman Sachs remains clearly optimistic about gold. The U.S. investment bank confirmed its forecast of $4,900 per ounce by the end of 2026 – and at the same time speaks of “significant” further upside potential beyond this target. From the analysts’ point of view, the background to this is persistently low positioning in gold, structurally higher purchases by central banks and possible shifts in the diversification strategies of institutional and private investors.
Since the beginning of the year, the gold price – supported by strong central bank purchases, rising inventories in gold-backed ETFs, a weaker US dollar and growing demand from private investors – has already risen by around 60%. However, Goldman Sachs assumes that the main drivers of this gold rally could continue to have an impact in 2026.
Goldman Sachs: Gold Remains a Core Component of the Commodities Strategy
In a recent commentary, Goldman Sachs reaffirms its assessment that gold could rise to around $4,900 per ounce by the end of 2026 in the base-case scenario – which, from the bank’s perspective, still means around 20% additional potential compared to the current level.
Daan Struyven, Head of Oil Market Research at Goldman Sachs and one of the defining voices behind the gold outlook, points to two key drivers: Firstly, the structurally higher purchases by central banks, particularly from emerging markets, and secondly, the ongoing interest rate cut phase by the US Federal Reserve.
The bank had already raised its gold price forecast for 2026 from $4,300 to $4,900 per ounce on October 6. At the time, the analysts justified the adjustment primarily with robust inflows into Western gold ETFs and continued purchases by central banks.
Central Banks as Gold Buyers – Diversification Away from the US Dollar
A key argument from Goldman Sachs: Since the freezing of Russian currency reserves in 2022, many emerging market central banks have become aware of how vulnerable large US dollar holdings can be in an emergency. Gold, physically stored in one’s own country, is described as the “only truly safe asset” that cannot be accessed from outside.
Against this backdrop, Goldman Sachs also expects solid purchases by central banks in 2025 and 2026. The analysts estimate average gold purchases of around 80 tons in 2025 and around 70 tons in 2026. At the same time, they expect a continued diversification of currency reserves away from the US dollar towards gold and other currencies.
Struyven also points to the relatively small size of the gold market compared to other asset classes. According to this, the global gold ETFs are about 70 times smaller than the US Treasury market in terms of market value. Even small shifts from the global bond market into gold could therefore trigger significant price movements.
From Goldman Sachs’s perspective, this is a key lever: Should the diversification theme, which has so far been predominantly driven by central banks, be taken up more strongly by private and institutional investors, this could generate additional demand beyond the already increased forecast.
Fed Rate Cuts and ETF Inflows as the Second Pillar
Goldman Sachs sees the monetary policy of the US Federal Reserve as the second main driver for gold. Since gold does not generate any current income, the opportunity costs increase with high interest rates – and decrease accordingly when the Fed cuts key interest rates.
The bank’s economists expect further interest rate cuts of around 75 to 100 basis points by mid-2026. According to the analysts, lower real interest rates could trigger additional inflows into gold-backed ETFs, as gold is seen as a hedging instrument against inflation risks, fiscal uncertainties or doubts about the independence of the Fed.
There are already clear movements: According to Goldman Sachs, Western gold ETFs have significantly expanded their holdings in recent months. The current ETF holdings have thus reached the level that can be derived from the previous interest rate and market scenario. The analysts emphasize that this development should not be interpreted as “overshooting”, but as settling at the model-based expected value.
It is interesting to note that, according to Goldman Sachs, the short-term, speculative positioning has remained comparatively stable. The recent price increase in gold is therefore more attributable to strategic buyers – central banks and ETF investors – than to short-term trading positions.
Small Market, Asymmetric Opportunities – But Not a Sure Thing
Goldman Sachs currently considers gold to be the most important “long” recommendation in the commodities sector. The bank argues that an attractive price level is already possible in the base-case scenario, but that the role of gold could be further strengthened, particularly in scenarios with increased risks – such as concerns about fiscal developments in the USA or in the event of discussions about the independence of the Federal Reserve.
At the same time, it is emphasized that the risks surrounding the updated gold price forecast are skewed more to the upside than to the downside. In particular, the possibility that private investors and institutional investors will adjust diversification strategies in favor of gold to a greater extent could cause ETF holdings to rise above the level currently assumed in the models.
In the current market environment, gold thus remains a central component in many portfolios from Goldman Sachs’s perspective – supported by structural purchases by central banks, the scenario of falling real interest rates and the fact that even relatively small shifts in a comparatively small market can lead to significant price movements.
