Goldman Sachs Raises Gold Price Target to $3,100 Amid Strong Central-Bank Demand

Goldman Sachs has increased its year-end gold price forecast to $3,100 per ounce, citing sustained central-bank buying and growing interest in gold-backed exchange-traded funds (ETFs).

The investment bank also suggested that economic uncertainty, including concerns over tariffs, could push prices even higher, potentially reaching $3,300 per ounce.

Gold has experienced a strong rally this year, reaching record highs over a seven-week period. Analysts Lina Thomas and Daan Struyven from Goldman Sachs attribute this rise to:

• Central-Bank Purchases: Official-sector demand is now projected to average 50 tons per month, higher than previous estimates. If this figure increases to 70 tons per month, Goldman predicts gold could climb to $3,200 per ounce by the end of 2025.
• Federal Reserve Rate Cuts: Expected interest rate reductions could make gold more attractive as an investment, further supporting its price.
• ETF Inflows: A gradual increase in gold-backed ETF holdings is anticipated as investors seek a hedge against macroeconomic uncertainties.
• Tariff Uncertainty: Continued economic policy concerns, particularly related to trade and tariffs, may drive speculative positioning in gold.

Gold’s performance has outpaced other major assets this year, including US stocks, bonds, the Swiss franc, and the Japanese yen. Spot gold recently traded near $2,909 per ounce, following a record high above $2,942 last week.

Goldman Sachs’ new outlook follows a prior forecast of $3,000 per ounce, which was revised upward due to stronger-than-expected central-bank demand. Other analysts, including UBS strategist Joni Teves, have also raised their gold price targets, reinforcing the broader bullish sentiment on the metal.

While Goldman Sachs remains optimistic, it acknowledges that if economic uncertainty eases, investor positioning could normalize, potentially limiting further price increases. Additionally, any unexpected shifts in Federal Reserve policy or a slowdown in central-bank buying could impact gold’s trajectory.

However, concerns over US fiscal sustainability, inflation, and financial market risks could provide additional support for gold as a safe-haven asset. Should these risks intensify, Goldman sees the potential for gold to rise an extra 5%, reaching $3,250 per ounce by the end of 2025.

Bloomberg, Market Watch, and Reuters contributed to this report.