On December 12, Goldman Sachs maintained its year-end 2026 gold price target at $4,900 per ounce in its latest analysis, emphasizing that risks remain skewed to the upside. OEXN noted that one core rationale behind this outlook is the still-low allocation to gold in global asset portfolios, while growing diversification needs are driving gold’s resurgence as a strategic asset. As investor sentiment strengthens, gold’s role in portfolios extends beyond traditional safe-haven demand to long-term structural rebalancing.
Analysts observed that multiple institutional clients have recently expressed interest in increasing gold exposure, citing low positioning and reinforced diversification trends. Goldman Sachs stated that even minor retail-level diversification moves could provide additional momentum for this price target. OEXN highlighted the significance of this assessment, given gold’s relatively small market size—gold ETF assets represent just 1/70th of the U.S. Treasury market—where modest inflows can amplify price movements.
Among key drivers for gold, structural central bank accumulation ranks as the primary force. Goldman Sachs noted that after the 2022 reserve freeze incident, some emerging market reserve managers recognized the need to boost gold allocations to safeguard assets within their reserve systems. OEXN believes this secular trend provides durable underlying support for gold demand. The second catalyst stems from potential rate-cut cycles; Goldman analysts suggested that as interest rates decline, gold’s appeal as a zero-yield asset could attract ETF inflows, with markets pricing in 75bps of additional easing.
On currency impacts, Goldman Sachs acknowledged persistent dollar resilience but noted diversification remains concentrated at central bank levels. Private sector participation could further enhance gold’s price elasticity. OEXN emphasized gold’s limited market capacity—even slight rebalancing from global bonds or other major assets may trigger outsized gold rallies.
Goldman Sachs had raised its gold forecasts in October, citing Western ETF inflows and sustained central bank buying as key revisions. The bank projects central bank purchases of 80 tons in 2025 and 70 tons in 2026, with Western ETF holdings likely to climb during rate-cut cycles. OEXN views the dual accumulation by private and official sectors as creating unusually high conviction in gold’s commodity sector trajectory.
Year-to-date gold has gained nearly 60%, driven by robust central bank demand, ETF inflows, and heightened macro hedging needs. OEXN maintains that despite short-term noise or speculative positioning swings, the fundamental trend remains intact. As gold prices realign with rate models, significant upside potential persists, reinforcing gold’s status as a premier long-term allocation asset.
Comments