Goldman Sachs Raises Year-End Gold Target to $3,100 an Ounce
Markets Cheer Central-Bank Buying and Inflows into Bullion-Backed ETFs
Goldman Sachs Group has raised its year-end gold target to $3,100 an ounce, driven by central-bank buying and inflows into bullion-backed exchange-traded funds (ETFs), highlighting Wall Street’s enthusiasm for the metal.
Central-Bank Demand May Average 50 Tonnes a Month
According to analysts Lina Thomas and Daan Struyven, central-bank demand may average 50 tonnes a month, more than previously expected. If uncertainty over economic policy persists, including on tariffs, bullion could hit $3,300 an ounce on higher speculative positioning, resulting in an annual gain of 26%, according to Bloomberg calculations.
Record-Breaking Performance
The precious metal has roared higher this year, setting successive records in a seven-week winning run that’s built on last year’s surge. The commodity’s sustained advance has been driven by increased purchases by central banks, a streak of rate cuts from the Fed, and mounting investor concern over US President Donald Trump’s disruptive tariff announcements.
Goldman’s "Go for Gold" Recommendation
"We reiterate our ‘Go for Gold’ trading recommendation," Thomas and Struyven wrote. "We see significant hedging value in long gold positions because of a potential increase in trade tensions."
Inflation Fears and Fiscal Risks May Push Central Banks to Buy More Gold
In addition, inflation fears and fiscal risks "may push central banks – especially those holding large US Treasury reserves – to buy more gold," they said.
Goldman’s Revised Forecast
The more bullish outlook follows Goldman’s push back of a year-end $3,000 forecast last month, which came after official-sector purchases estimated at 108 tonnes in December, according to the analysts. Elsewhere, there’ll be a "gradual boost" to ETF holdings on two expected Fed cuts, they said.
Bullish Predictions from Leading Banks
The revised forecast sits alongside a host of other bullish predictions from leading banks. Citigroup, for example, expects prices to hit $3,000 an ounce within three months, driven by geopolitical tensions and trade wars stoked by Trump, boosting demand for haven assets.
Central-Bank Accumulation
Central-bank accumulation has been a major theme in the global bullion market over recent quarters. In Asia, the People’s Bank of China expanded its holdings for a third straight month in January. Other official buyers have included Poland and India, according to the World Gold Council.
Holdings in Bullion-Backed ETFs
Holdings in bullion-backed ETFs have been expanding too, although the total figure remains far below the peak hit in 2020, during the pandemic. So far in 2025, such funds have climbed by about 1%, according to a Bloomberg tally.
Spot Gold
Spot gold was trading near $2,912 an ounce, after setting a record above $2,942 last week. Prices have surged by about 45% over the past 12 months, outpacing the 18% gain registered by a gauge of global stocks.
Conclusion
Goldman Sachs’ revised forecast highlights the growing optimism surrounding the metal, driven by central-bank buying and inflows into bullion-backed ETFs. As the market continues to surge, investors may want to consider taking a long position in gold to ride the wave.
FAQs
Q: What is driving the surge in gold prices?
A: Central-bank buying, inflows into bullion-backed ETFs, and mounting investor concern over US President Donald Trump’s tariff announcements.
Q: What is Goldman’s new year-end gold target?
A: $3,100 an ounce.
Q: What is driving the central-bank demand for gold?
A: Uncertainty over economic policy, including on tariffs, and inflation fears.
Q: What is the current spot gold price?
A: $2,912 an ounce.
