Goldman Sachs Raises Its Gold Price Outlook By End-2025
Goldman Sachs raised its year-end gold price outlook from $3,100 to $3,300 per troy ounce and its forecast range to $3,250-$3,520, citing an unexpected surge in exchange-traded fund (ETF) inflows and continued strong demand from central banks.
Gold recently surged above $3,000 per ounce on March 14 after a period of speculative repositioning, driven by headlines surrounding a potential tariff package targeting the EU and media attention on the “Mar-a-Lago deal” framework.
This resulted in a sharp rebound in speculative lengths, pushing gold back to the 85th percentile of positions after a net addition of around 60 tonnes.
Goldman’s bullish outlook is supported by expectations that central banks will maintain their strong buying momentum. The bank now expects an average of 70 tonnes per month in central bank purchases, up from its previous estimate of 50 tonnes.
“Our base case forecast assumes speculative positioning normalizes from its current high (85th percentile) levels, while the upper end of our price range reflects continued elevated positioning amid heightened uncertainty,” Goldman strategists Lina Thomas and Daan Struyven said in a report.
The report also highlighted the possibility that, under a tail-risk scenario, gold prices could top $4,200 an ounce by the end of 2025.
China’s role in the global gold market remains important, with its central bank continuing to accumulate gold as part of a broader diversification strategy.
Goldman Sachs estimates that if China maintains its current pace of gold purchases — about 40 tonnes per month — it will take 3-6 years for its share of gold reserves to reach 20-30%, closer to developed market standards.
The Wall Street firm also noted that the recently authorized gold allocation to Chinese insurance companies, totaling about 280 tonnes, could provide a floor for demand when prices fall.
Possible downside risks include a Russia-Ukraine peace deal, which could trigger short-term speculative selling. However, strategists believe this is unlikely to materially alter the structural supply-demand imbalance.
“The Russian central bank’s asset freeze sets a significant precedent that should keep central bank demand elevated,” the report said.
Another potential event that could cause a temporary price drop is a sharp equity selloff, which could lead to liquidation of margin-driven gold positions.
However, such an event would likely be short-lived, strategists said, as high uncertainty would eventually draw speculative buyers back into the market.
Earlier this week, Bank of America also raised its gold price target, to $3,500 an ounce, the level it expects gold to reach within two years.
Additionally, the bank raised its average price forecast, projecting gold will trade at $3,063 an ounce in 2025 and $3,350 an ounce in 2026, up from previous estimates of $2,750 and $2,625 an ounce, respectively.
Source: Investing.com
