Goldman Sachs has extended its gold price forecast to $3,000 per ounce by mid-2026, up from the previous target. The bank expects fewer cuts from the Federal Reserve.
According to a recent Bloomberg report, the price of gold is expected to settle at $2,910 per ounce by the end of the year. Slower monetary easing in 2025 is seen as reducing demand for gold-backed exchange-traded funds (ETFs).
Weak ETF flows in December, driven in part by reduced uncertainty following the US election, also created a lower benchmark for gold prices in 2024, analysts Lina Thomas and Daan Struyven say. .
“Conflicting factors have kept gold prices in a tight range,” the analysts said. They added that the rise in central bank purchases offset the decline in speculative purchases. However, central bank purchases will be the key driver of price developments, with monthly purchases expected to average 38 tonnes until mid-2026.
Goldman Sachs estimates inflation is about a little shallower than the market
US monetary easing, safe-haven buying and strong demand from central banks have sent gold up 27% last year. The increase, however, eased in November due to the rise in the dollar caused by Donald Trump’s electoral victory.
In recent months, gold prices have been more under pressure than up, as lingering inflation concerns have prevented the Fed from making further cuts this year.
Goldman economists now expect the Fed to cut rates by 75 basis points this year, down from its previous forecast of 100 basis points.
However, the bank now estimates that inflation is about a little shallower than the market, and expects core inflation to fall. Economists also don’t believe Trump’s second-term policies will cause interest rates to rise.
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