Goldman Sachs has revised its gold price forecast for the end of 2025, increasing it from $2,890 to $3,100 per ounce, citing growing demand from central banks. The bank estimates that the structural demand from central banks could drive gold prices up by 9% by year-end. Additionally, as interest rates decline, ETF holdings are expected to increase.
Goldman Sachs suggests that if uncertainties decrease, it could offset resistance from investor position normalization. However, if policy uncertainties, including tariff concerns, remain high, gold could potentially surge to $3,300 per ounce by year-end due to speculative positions. The bank has also adjusted its central bank demand assumption from 41 tons to 50 tons per month.
If central banks purchase an average of 70 tons per month, and assuming position normalization, gold prices might reach $3,200 per ounce by the end of 2025. Conversely, if the Federal Reserve maintains stable interest rates, the price is expected to reach $3,060 per ounce in the same period.
Goldman Sachs reiterates its "Go for Gold" trading recommendation, highlighting that while decreased uncertainty may lead to tactical price pullbacks, long gold positions remain a robust hedge. Potential trade tensions, Fed-related risks, and threats of financial or economic downturns could push prices toward the upper limit of Goldman's high uncertainty range.
Moreover, concerns about U.S. fiscal sustainability could drive gold prices up by an additional 5% to $3,250 per ounce by December 2025. Rising concerns about inflation and fiscal risks might boost speculative positions and ETF holdings, while worries over U.S. debt sustainability could encourage central banks, especially those with substantial U.S. Treasury reserves, to increase gold purchases.
Gold prices rose following tensions from recent trade threats by U.S. President Trump, rebounding from a significant single-day drop. Despite a 1.6% decline last Friday, gold traded near $2,900 per ounce. The Commodity Futures Trading Commission (CFTC) reported that fund managers reduced bullish gold bets to a four-week low for the week ending February 11.
