Goldman Sachs' latest report reveals that US gold ETFs currently account for just 0.17% of private non-cash financial portfolios, approximately 6 basis points below the 2012 peak level and significantly lower than institutional recommendations. The bank suggests that if diversification flows expand from central banks to private investors, its $4900 gold price target faces "substantial upside risks."
Goldman Sachs argues that gold allocations in US private investment portfolios are at historically low levels, creating substantial room for gold prices to reach the $4900 per ounce target within the next 18 months. Analysts Lina Thomas and Daan Struyven note that the current 0.17% allocation in US gold ETFs is far below the mid-to-high single-digit percentage allocations recommended by institutions such as Citi, UBS, and Bridgewater.
The bank estimates that every 1 basis point increase in gold's share of US financial portfolios—driven by incremental investor purchases rather than price appreciation—could push gold prices up by approximately 1.4%. Analysts highlight that if diversification trends extend from central banks to private investors, the $4900 target faces notable upside potential. Spot gold currently trades at $4213.2 per ounce, down 0.36% intraday but showing a rebound trend this week.
According to 13F filings, fewer than half of large US institutional investors managing over $100 million hold any gold ETF exposure. Even among those invested, allocations typically range between 0.1% and 0.5%.
Goldman Sachs' research indicates that Western ETF holdings remain aligned with fair-value estimates based on US federal funds rates, leaving room for further portfolio diversification. In the US, gold ETFs—the primary tool for gold exposure—represent just 0.17% of private non-cash financial portfolios (defined as stocks and bonds). This level remains about 6 basis points below the 2012 peak, as portfolio growth has outpaced gold price and trading volume gains over the past decade.
Several investors have recently advocated increasing gold allocations, with some recommending over 2%. Citi's Global Investment Committee added a 2% gold position in June, while UBS Global Wealth Management noted that "historical data shows mid-single-digit gold allocations optimize diversified portfolios."
Analysis of 13F filings tracking major US investors reveals two key findings: gold ETF ownership is highly concentrated, with fewer than half of institutions reporting exposure, and allocations remain minimal—just 0.16% value-weighted across all filers (0.22% among long-term investors). As of Q3 2025, US institutional gold participation stands at 46%, up from approximately 30% in 2020 academic studies. Among exposed institutions, equal-weighted average allocations are 1.7%, versus 0.22% value-weighted.
Client feedback indicates long-term capital allocators are considering gold as a strategic diversification tool. These investors typically operate on multi-quarter approval cycles and multi-year horizons. Even modest reallocations from global bond and equity portfolios could significantly impact gold prices if private investors seek value storage outside the financial system amid macroeconomic uncertainties, including developed market fiscal outlooks.
To assess potential upside from diversification and de-dollarization themes, Goldman Sachs calculates that each 1 basis point increase in gold's US portfolio share—driven by new investor demand—could lift prices by 1.4%. This estimate derives from the bank's pricing framework, where 100 tonnes of additional demand would raise gold prices by approximately 1.7% (within a 1.5%-2% range). Analysts converted a 1 basis point portfolio increase into dollar terms (using $4198/oz gold) and then into physical demand in tonnes.
The report emphasizes that even moderate reallocations from global portfolios could disproportionately elevate prices in gold's relatively small market if private investors seek alternatives amid systemic uncertainties. Goldman notes US gold allocations don't reflect global patterns—particularly in emerging markets, where cultural preferences and historical financial access limitations make gold a more significant household wealth component. Cross-asset strategists estimate gold represents about 6% of global outstanding financial assets.
Comments