Goldman Sachs hiked its gold price forecast to $3,100 per troy ounce (toz) by the end of 2025, up from the previous $2,890/toz.
The upward revision comes amid expectations of continued robust demand from central banks, particularly in light of a strong December reading from Goldman's central bank nowcast, which showed a purchase of 108 tonnes of gold, far exceeding the pre-2022 average of 17 tonnes. China led these purchases with 45 tonnes added to its reserves.
In turn, the Wall Street bank has adjusted its monthly central bank demand assumption to 50 tonnes, an increase from the prior estimate of 41 tonnes. This anticipated structural rise in central bank gold acquisitions is projected to contribute a 9% increase to the gold price by December 2025.
“This, combined with a gradual boost to ETF holdings as our economists expect the Fed to cut twice this year, should outweigh the drag from normalizing positioning, assuming uncertainty diminishes,” Goldman strategists Lina Thomas and Daan Struyven said in a note.
Goldman Sachs sees the overall risks to its gold price forecast as skewed to the upside.
Persistent policy uncertainty, including ongoing tariff concerns, could propel gold prices to as high as $3,300 per troy ounce by the end of the year, the bank notes.
Moreover, should central bank demand exceed expectations, reaching an average of 70 tonnes per month, gold prices might climb to $3,200/toz by the end of 2025.
On the other hand, Goldman would expect the gold price to reach $3,060 by the end of 2025
Goldman strategists maintain their 'Go for Gold' recommendation, highlighting gold's value as a hedge despite potential short-term downside risks. They see possible upside from rising trade tensions, financial risks, or concerns about US fiscal sustainability.
If such concerns grow, gold prices could increase by 5% to $3,250 by December 2025, strategists noted, driven by higher speculative positioning, ETF inflows, and central bank purchases amid debt sustainability worries.
