Goldman Sachs maintains a bullish outlook on gold at $5,400, driven by central bank gold purchases leading to a strong mid-term rebound

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Source: Huitong Finance

According to the report, although spot gold has recently faced notable selling pressure, Goldman Sachs still maintains a bullish view on gold and predicts that by the end of 2026, the gold price is likely to resume its uptrend, with a target of $5,400 per ounce. In their latest report, analysts Lina Thomas and Daan Struyven emphasized that gold’s medium-term outlook remains solid, mainly driven by continuous gold purchases by central banks worldwide, as well as support from the U.S. Federal Reserve expected to cut interest rates twice within the year. Currently, spot gold is quoted at around $4,550 per ounce, down about 13%-14% from the historical high in January, but overall it is still trading within a high-level, sideways consolidation range.

The core logic behind Goldman Sachs’ raised forecast is that the global reserve management institutions are accelerating their diversification allocation. The report notes that if the Iran conflict prompts countries to step up selling of “traditional Western assets” and shift toward diversified allocations, gold’s upside potential will remain huge. Lina Thomas and Daan Struyven recently said in connection with the theme that the private sector’s hedging demand for macro policy risks has begun to take shape in a meaningful way, creating competition with central banks’ gold purchases and jointly lifting the gold price’s central tendency. At the same time, the report clearly states that concerns about certain central banks potentially selling gold to support their domestic currencies are unlikely to materialize; Gulf countries are more inclined to carry out currency-absorption interventions by reducing their holdings of U.S. Treasuries. Under the assumption that there is no additional investment by the private sector, analysts expect medium-term price fluctuations to become more stable, which would allow the official sector’s pace of gold buying to increase again, with an average monthly purchase of about 60 tons.

To show more intuitively the difference between Goldman Sachs’ forecast and the current market scenario, the following table compares key gold price scenarios:

The data shows that supported by dual buying from both central banks and the private sector, gold’s potential for a medium-term rebound is significantly higher than the risk of short-term volatility, highlighting its unique value as a tool for diversified allocation. Looking further, the current global macro environment provides gold with multiple tailwinds. Expectations for a more accommodative Federal Reserve policy combined with the ongoing escalation of geopolitical risks lead countries, especially major Asian countries, to treat gold as an important component of strategic reserves. This structural demand not only offsets near-term selling pressure, but also helps cement a long-term bottom for gold prices. On the technical side, although spot gold has gone through a phase of adjustment, it still holds key support levels. Indicators such as the RSI show that rebound momentum after oversold conditions is building. If energy supply shocks do not worsen further, gold could gradually return to an upward trajectory under the catalyst of policy tailwinds.

Editor’s Summary

Goldman Sachs’ medium-term bullish view on gold reflects long-term support from central bank gold purchases and the trend toward asset diversification. While near-term selling pressure brings tactical adjustment headwinds, the dynamic balance between energy risk and policy easing provides a clear path upward for gold prices. Investors should continue to monitor central bank gold purchase data, the timing of Federal Reserve rate cuts, and how geopolitical conditions evolve in order to flexibly capture allocation opportunities in the precious metals market.

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Responsible editor: Zhu Hunan