Goldman Sachs reiterated its bullish stance on gold, maintaining a 2026 year-end price target of $4,900 per ounce with significant upside potential. The bank's analysts noted that current gold allocations remain low, while a potential shift toward portfolio diversification could enhance the metal's investment appeal.
This outlook aligns with recent comments from Dan Struyven, Goldman's head of oil research, who stated on November 26 that even modest increases in retail investor participation and diversification could substantially boost gold prices. "We forecast nearly 20% upside potential by late 2026, lifting our target to $4,900/oz," Struyven said. "While this gain won't match 2024's 60% rally, two key drivers will continue supporting prices through 2025 and 2026."
The first catalyst is structural growth in central bank gold purchases. "Since the 2022 freeze of Russian reserves, emerging market central banks have recognized gold as the only truly safe asset when held domestically," Struyven explained. The second driver stems from the Federal Reserve's easing cycle. "As a non-yielding asset, gold becomes more attractive amid rate cuts, accelerating inflows into gold ETFs," he added, projecting 75 basis points of additional Fed cuts.
When questioned about the dollar's resilience potentially undermining gold's performance—given currency depreciation's traditional role in bullion rallies—Struyven emphasized broadening demand drivers. "While central bank diversification remains core, private sector participation could amplify our bullish case," he noted, highlighting gold's relatively small market size. "Global gold ETF assets represent just 1/70th of U.S. Treasury markets—even minor portfolio shifts could disproportionately lift prices."
This dynamic underpins Goldman's preference for gold among commodities. "Our base case offers substantial upside, but gold could outperform further in adverse scenarios like fiscal instability or challenges to Fed independence," Struyven remarked.
On October 6, Goldman raised its 2026 gold forecast from $4,300 to $4,900/oz, citing expected Western ETF inflows and sustained central bank buying. Analysts wrote: "Risks remain skewed upward as private diversification into gold's compact market may exceed our rate-based ETF estimates." They project 100bps of Fed cuts by Q2 2026, boosting ETF holdings, alongside average annual central bank purchases of 80 tons in 2025 and 70 tons in 2026 as EM banks diversify from dollars.
Spot gold has surged nearly 60% year-to-date, fueled by robust central bank demand, resurgent ETF interest, dollar weakness, and retail hedging against geopolitical tensions. "Speculative positioning has stabilized after September's surge, with Western ETF holdings now fully aligned with our rate-based models—suggesting recent strength isn't overextended," analysts concluded.
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