Goldman Sachs Raises Gold Forecast: Why Now Is the Time to Rethink Your Investment and Trading Plan

Goldman Sachs has raised its forecast for the price of gold. They now expect it to reach US$4,900 per ounce by December 2026, up from a prior estimate of US$4,300.

Their reasoning:

  1. Central banks (especially in emerging markets) are buying more gold to diversify their reserves. They expect about 80 metric tons of gold purchases in 2025 and 70 metric tons in 2026. 
  2. Western investors, via exchange-traded funds (ETFs) backed by gold, are expected to increase holdings.
  3. They expect the US central bank (Federal Reserve) to cut interest rates by about 100 basis points (1 percentage point) by mid-2026. A rate cut tends to lower the opportunity cost of holding non-yielding assets like gold. 
  4. They note that gold has already surged more than 50% this year, driven by strong central bank buying, growing ETF demand, a weakening US dollar, and global trade/market uncertainty.

What it means for investing and planning.

    1. Gold could be a hedge/alternative asset
      With Goldman Sachs expecting strong tailwinds for gold (central-bank demand, ETF flows, weaker dollar, potential rate cuts) it suggests metal could outperform (or at least serve as a hedge) in certain scenarios — e.g., inflation rising, dollar weakening, stock markets volatile.
    2. Interest‐rate environment matters
      If rates drop (as they forecast), the relative attractiveness of gold (which pays no interest) improves. If you expect rate cuts, gold becomes more appealing. Conversely, if rates rise or stay high, the case is weaker
    3. Currency/dollar strength weakens gold’s case
      When the US dollar is strong, gold often becomes relatively expensive for holders of other currencies and can suffer. The article points to a weakening dollar as part of why gold rose.
    4. Market sentiment/trend momentum
      Having already risen 50% this year means some of the positive drivers may already be priced in. As a trader, that means the potential upside may be more limited (or the risk of pull-back higher). Planning wise: even if the long-term case is solid, from a shorter horizon you might want to consider entries or risk management carefully.
    5. Timing & strategy for intraday/investment mix
      • For intraday trades: Use gold (or gold futures/ETFs) as a volatility play when macro announcements (Fed speeches, inflation data) hit.
      • For the investment horizon: Adjust allocation or set a target for adding gold exposure given the risk.