Gold Is Forecast to Climb as Central Banks Buy the Precious Metal - Goldman Sachs

AI desk brief

Goldman Sachs Research sees gold extending its 2026 rally, forecasting $4,900/oz by year-end versus around $4,600/oz on Aug. 25 after a 15% rebound from the mid-July low. The bank says the primary supports are sustained central bank accumulation and fading expectations for further Fed tightening, with lower inflation and a more benign rate path reducing the opportunity cost of holding gold.

The note highlights central bank buying as the key structural driver: Goldman expects average monthly purchases of 50 tonnes in 2026, up from 17 tonnes pre-2022, and says buying accelerated to 100 tonnes/month in June on a three-month seasonally adjusted basis from 66 tonnes the prior month. China was the largest identifiable buyer in June. Goldman also frames the move as part of a multi-year reserve diversification trend accelerated by geopolitical risk and the perceived safety of gold versus foreign-currency reserves that can be frozen.

Near term, the bank warns that rising demand for gold call options could increase two-way volatility even as it supports upside. As spot approaches key call strike levels, dealer hedging could force additional buying and amplify the rally; on the way down, those hedges could unwind into selling. Goldman’s $4,900/oz forecast does not include this extra derivative demand, implying upside risk to the target if hedging flows intensify.