Goldman Sachs has revised its gold price outlook, forecasting that the precious metal will reach $3,000 per ounce by mid-2026, up from its previous target. This update comes as the bank expects a slower pace of rate cuts from the Federal Reserve in the coming years.
According to a recent report, gold prices are projected to close at $2,910 per ounce by the end of 2025. This forecast is influenced by expectations of slower monetary easing, which is anticipated to reduce demand for gold-backed exchange-traded funds (ETFs).
Analysts Lina Thomas and Daan Struyven highlighted that December saw weaker ETF inflows, partly due to diminished uncertainty following the U.S. presidential election. This created a lower price baseline for gold in 2024. The analysts noted that gold prices have been constrained within a narrow range, with central bank purchases counterbalancing lower speculative buying.
The analysts emphasized that central bank demand will be a major driving force for gold prices over the next few years. They predict that monthly central bank purchases will average 38 tons through mid-2026, which could help sustain the upward momentum in gold prices.
Goldman Sachs’ latest forecast reflects a more cautious outlook on inflation compared to the broader market. The bank now expects inflation to be slightly lower than previously anticipated, with underlying inflation expected to decline. Despite the possibility of a rate cut of 75 basis points this year—down from an earlier forecast of 100 basis points—the bank does not anticipate that U.S. monetary policy, particularly under a potential second term for former President Donald Trump, will lead to higher interest rates.
The bullish trend in gold prices in 2023 was largely driven by a combination of U.S. monetary easing, safe-haven demand, and robust central bank purchases, pushing gold prices up by 27%. However, gold’s rally began to slow in November, coinciding with a strengthening of the U.S. dollar following Trump’s election victory. More recently, inflation concerns have kept the Federal Reserve from making further rate cuts, putting downward pressure on gold prices.
Goldman Sachs now believes that these complex factors will support gold’s price trajectory, forecasting that it will continue to climb, albeit at a more gradual pace than earlier projections suggested.
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