Goldman says gold to hit US$5,400 an ounce by end 2026
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Gold has soared more than 70 per cent over the past 12 months on safe haven demand.
PHOTO: REUTERS
NEW DELHI - Goldman Sachs raised its year-end gold price forecast by more than 10 per cent, reflecting growing private sector diversification into bullion on top of already-strong demand from central banks and exchange-traded funds (ETFs).
The bank raised its December 2026 price target to US$5,400 an ounce, from a prior forecast of US$4,900, on the assumption that private investors who have bought gold as a hedge against macro policy risks will maintain these positions through the end of 2026, analysts including Daan Struyven and Lina Thomas wrote in a note dated Jan 21.
Unlike previous hedges tied to specific events, such as the November 2024 US election, positions taken against perceived risks, such as fiscal sustainability, may not fully resolve in 2026 and are therefore “stickier”, the analysts said.
Gold has soared more than 70 per cent over the past 12 months, smashing successive records on a scorching rally that has continued into the early weeks of 2026. Capital is being driven towards haven assets as global power dynamics shift dramatically and US President Donald Trump renews his attacks on the Federal Reserve, shaking faith in the independence of the US central bank.
Central bank buying is expected to average 60 tonnes a month in 2026, with the monetary authorities in emerging markets “likely to continue the structural diversification of their reserves into gold”, the analysts said.
Western ETF holdings, meanwhile, have increased by around 500 tonnes since the start of 2025, outpacing predictions based solely on US interest rate cuts. Goldman expects a further 50 basis points of Fed easing in 2026.
As concerns mount over long-term monetary and fiscal policy trajectories in major economies, gold has also been boosted by demand linked to the so-called debasement trade, including physical purchases by high-net-worth families, Goldman said.
The “debasement trade” is an investment strategy where investors sell traditional fiat currencies (like the US dollar) and government bonds, and buy instead tangible assets like gold, silver, Bitcoin, stocks, and real estate, due to fears that excessive government debt and money printing will erode the value of paper money. BLOOMBERG
