Goldman Sachs sees the price of gold reaching $3,000 by mid-2026

(Reuters) – Goldman Sachs estimates that an ounce of gold will only reach the price of $3,000 in the second quarter of 2026, compared to a forecast for December 2025 previously, due to a smaller-than-expected rate cut from the Federal Reserve American (Fed) will weigh on the precious metal.

“Our US economists now expect 75 basis points of rate cuts in 2025 (compared to 100 basis points previously expected) with a slightly higher terminal rate, from 3.5% to 3.75%. This would translate by a slowdown in the pace of gold purchases by ETFs (listed funds), which takes us further away from achieving our objective of $3,000 per ounce of gold,” said the bank said in a note published on Sunday.

By the second quarter of 2026, gold should increase by 14% to reach analysts’ objective, an increase linked mainly to structurally higher demand from central banks, explains Goldman Sachs.

Gold hit a record high of $2,790.15 an ounce in October, driven by the Fed’s rate cut and escalating geopolitical tensions.

After cutting rates three times in 2024, the US central bank said in December it would only cut rates twice in 2025 as inflation remains persistent.

The price of gold has fallen more than 5% from its record high and is trading around $2,630 at 11:10 GMT on Monday.

By the end of 2025, gold is expected to reach $2,910, the bank predicts.

“Opposing forces – weaker speculative demand and structurally higher purchases by central banks – have offset each other, keeping gold prices in a stable range over the past few months,” writes the bank, which adds that demand for ETFs has not increased as much as expected.

The main downside risk to the 2026 forecast would be a Fed interest rate kept at a restrictive level for longer, Goldman Sachs said. If the Fed does not cut its interest rate, the price of gold would only reach $2,910 by May next year, he added.

“We also see upside risk to our gold price forecast related to its role as a hedge for the two main negative scenarios for the US economy, a tariff escalation and renewed market concern over the fiscal viability”, concludes the bank.

(Reporting Anushree Mukherjee and Swati Verma in Bangalore, French version Corentin Chappron, editing by Kate Entringer)