Goldman Sachs analysts forecast gold will reach $4,900 per troy ounce by year-end, driven by central bank purchases of 50 tonnes a month. The bank's model did not factor in elevated demand for gold hedges via ETFs.
Goldman Sachs expects gold to climb to $4,900 per troy ounce by year-end, according to Lina Thomas, senior commodities analyst at Goldman Sachs Research, and Daan Struyven, co-head of Global Commodities Research. The forecast rests on sustained buying from central banks rather than a single catalyst.
Central banks keep buying at record pace
Thomas and Struyven expect central banks to purchase 50 tonnes of gold per month this year, close to 300% more than the 17 tonnes a month they bought before 2022. In June, central banks bought 100 tonnes on average, up from 66 tonnes in May. Goldman frames this as reserve diversification against geopolitical and financial risk, consistent with recent survey evidence, rather than a short-term reaction to any single event.
The bank also expects the Fed to stay on hold this year as inflation trends lower, removing a headwind that had weighed on gold. Gold tends to perform well when rates hold steady, so a scaling back of rate hike expectations adds further support to the metal, alongside the central bank buying.
Debasement trade and private demand still in play
Beyond the central bank story, Goldman also weighed the "debasement trade" narrative — concern over fiscal sustainability that has pushed some investors toward gold — as a medium-term factor that could lift prices past the $4,900 target. Gold's share in private portfolios remains low, and analysts noted that recent geopolitical developments, including tensions tied to Iran, may accelerate diversification beyond central banks into private investors, partly by weighing on perceptions of Western fiscal sustainability.
Goldman's model does not account for additional demand from gold-hedging ETFs, a factor the analysts did not weigh in reaching the $4,900 target.
Source: Bitcoin News
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