Goldman Sachs, long bullish on gold, said there’s room for the precious metal to rally even higher than its forecast, citing interest from private investors.
Surprisingly strong inflows to bullion-backed exchange-traded funds have exceeded their previous model, analysts including Daan Struyven said in a note.
The potential for private investors to diversify significantly into gold presents a “large upside risk” to their forecast of US$4,000 ($5,151.75) per ounce for mid-2026 and US$4,300 per ounce for the end of next year.
The bank said a month ago that gold can near US$5,000 an ounce were it to see inflows from just 1% of the privately-owned US Treasury market.
Gold is up 12% since Aug 29, having broken out of the US$3,200-US$3,450 an ounce range in which it spent much of the second and third quarters.
One catalyst is that central banks could be re-accelerating their gold-buying after a seasonal summer lull, the analysts said, while speculative positioning explains only a small amount of the latest breakout.
See also: Why investors can’t seem to get enough of gold
Bullion has been one of the strongest-performing major commodities of late, soaring nearly 50% this year and surpassing the inflation-adjusted record hit in 1980. The surge has been driven by concerted central bank buying and the US Federal Reserve resuming interest-rate cuts.
Gold was trading around US$3,865 an ounce on Thursday, holding a five-day rally that saw it hit multiple records and inch closer to the next milestone of US$4,000. The run came as the US government shutdown reinforced fiscal concerns and pressure on the US dollar.
