Gold may be getting comfortable at the top table. After a summer surge that caught many off guard, Goldman Sachs now expects the metal to fetch $4,900 an ounce by the end of 2026, up from its previous $4,300 forecast.
The US investment bank says the forces behind the 17% rally since late August look anything but fleeting.
Those forces? A steady diet of exchange-traded fund inflows in the West and persistent central bank buying. In Goldman's words, these “sticky inflows” have effectively raised the floor for prices.
Unlike the speculative bets that often come and go with market mood, this money is proving to have longer staying power.
It’s not hard to see why. Since the freezing of Russia’s foreign reserves in 2022, emerging market central banks have been diversifying their holdings... and gold has been a clear beneficiary.
Goldman expects them to buy an average of 80 tonnes in 2025 and 70 tonnes in 2026, a pattern that alone could add 19 percentage points to the forecast 23% price increase by the end of next year.
Another helping hand could come from monetary policy. The bank expects the US Federal Reserve to cut interest rates by one percentage point by mid-2026.
Lower rates tend to make non-yielding assets like gold more attractive, particularly to Western investors. Goldman thinks that shift could add another five percentage points to its expected gain.
What hasn’t changed much is the behaviour of short-term traders. Speculative positioning, the kind of leveraged bets that can swing wildly, has stayed relatively stable.
That, in Goldman’s view, makes the recent rally look more grounded than frothy.
Still, the bank thinks the risks are tilted upwards. Private investors may yet join the party, drawn by gold’s appeal as both a diversifier and a hedge against political and financial volatility. With the market for physical gold relatively small, even modest inflows could have an outsized effect.
For UK investors, this forecast offers food for thought. Gold is not an income generator and can fall as quickly as it rises, but it remains a useful counterweight to paper assets in unsettled times.
The move towards structural buying by central banks and now perhaps by ETFs, suggests that this bull run has more to it than a passing shimmer.