Is the bull market in gold not over yet? Goldman Sachs raises year-end gold price forecast to $5400.

Goldman Sachs raised its year-end gold price forecast by over 10%, reflecting a growing demand for gold from central banks and exchange-traded funds (ETFs), as well as increasing diversification of gold investments by private sectors. Goldman Sachs has raised its December 2026 gold price target from $4900 per ounce to $5400. Goldman analysts Daan Struyven and Lina Thomas wrote in a report on January 21 that the premise for the increase is that private investors using gold as a hedge against macro policy risks will continue to hold their positions by the end of this year. The analysts stated that unlike hedging strategies in the past, which were targeted at specific events (such as the November 2024 US elections), positions taken against expected risks like fiscal sustainability may not be fully unwound this year, making them more "sticky." In the past twelve months, gold prices have risen by more than 70%, reaching new highs during the strong rally that continued into the early part of this year. As the global power dynamics undergo drastic changes, and with Trump once again criticizing the Federal Reserve, confidence in the Fed's independence is shaken, leading to a flow of capital into safe-haven assets. The analysts predict that by 2026, central banks will be buying an average of 60 tons of gold per month, and central banks in emerging markets "may continue to drive diversification of their reserve structures by increasing gold holdings." Meanwhile, since the beginning of 2025, the amount of gold held by Western ETFs has increased by approximately 500 tons, exceeding predictions based solely on expectations of US interest rate cuts. Goldman Sachs expects the Federal Reserve to further ease monetary policy by 50 basis points in 2026. Goldman Sachs stated that concerns about the long-term monetary and fiscal policy directions of major economies have increased the demand for assets associated with so-called "currency debasement trades," pushing up the price of gold. This includes purchases of physical gold by high-net-worth families and investments in call options. The analysts at Goldman Sachs wrote that the risk of this forecast revision "significantly skews to the upside, as private investors may further diversify their investments in the face of ongoing global policy uncertainty." However, the analysts added: "Nevertheless, if expectations of long-term risks in global fiscal/monetary policy paths are significantly reduced, leading to unwinding of macro policy hedge tools, this could pose downside risks."