Goldman: Gold's Upside Remains Long
Goldman Sachs remains bullish on gold and believes the rally is still larger than its own estimates. The reason is that recent retail investor interest and gold-backed ETF inflows have far exceeded the bank's internal models, creating "upside risk" above its $4,000/oz (mid-2026) and $4,300/oz (end of next year) targets.
Goldman analysts warned that a month ago they already assessed that gold could approach $5,000/oz if just 1% of privately held US Treasury securities were converted into gold. With ETF inflows strengthening, the possibility of that scenario is increasingly open.
Price-wise, gold has risen 12% since August 29, breaking out of the $3,200–$3,450 range that confined it throughout the second and third quarters. The main driver is not just speculators; after central bank purchases are thought to have resumed their seasonal lull, speculative investors have only a small presence in the latest rally.
So far this year, gold has been one of the best-performing commodities, surging nearly 50% and surpassing the 1980 real record. This was driven by a combination of central bank buying and subsequent Fed rate cuts, which typically benefit non-yielding assets like bullion.
On Thursday morning, gold was trading around $3,865/oz, maintaining a five-day rally and approaching the $4,000 milestone. Fiscal concerns stemming from the US government shutdown have also weighed on the dollar, adding to gold's appeal as a safe haven.
Source: Bloomberg
