Goldman Sachs has extended its gold price forecast to $3,000 an ounce by mid-2026, up from the previous target. The bank expects fewer cuts by the Federal Reserve.
According to a recent Bloomberg report, gold prices are expected to set at $2,910 an ounce by the end of the year. Slower monetary easing in 2025 is seen as cutting demand for gold-backed exchange-traded funds (ETFs).
Weak ETF inflows in December, partly due to a drop in uncertainty following the U.S. election, also created a lower baseline for gold prices in 2024, according to analysts Lina Thomas and Daan Struyven.
“Conflicting factors have kept gold prices in a narrow range,” the analysts said. They added higher central bank purchases have offset lower speculative buying. However, central bank purchases will be the key factor for prices, with expected monthly buying to average 38 tons through mid-2026.
Goldman Sachs views inflation roughly an inch shallower than the market did
U.S. monetary easing, safe-haven buying, and robust central bank demand pushed gold soaring by 27% last year. However, the rally cooled off in November due to the dollar boost caused by Donald Trump’s election victory.
In recent months, gold prices have been more under pressure than bullish, as remaining inflation concerns have prevented the Fed from making further cuts this year.
The economists at Goldman now expect that the Fed will cut rates by 75 basis points this year, down from its earlier 100 basis point forecast.
The bank, however, now views inflation roughly an inch shallower than the market did, expecting underlying inflation to decline. Economists also don’t believe Trump’s second-term policies will lead to higher interest rates.
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