On Monday, Goldman Sachs extended its gold price estimate to $3,100 per ounce from $2,890 for 2025, citing strong demand from the central banks.
Higher demand from the central banks will bring the gold price up 9% by year-end, adding on top of a gradual increase of ETF holdings amid declining funds rate.
Assuming that uncertainty subsides, the new forecast should compensate for the drag from investors normalizing their portfolios.
However, if uncertainties like those of tariffs concerns stand firm, the gold price could intensify to $3,300 per ounce by year-end as investors keep their speculative stance.
Goldman also pushed its approximate demand from the central banks to 50 tonnes per month from previous 41 tonnes.
The gold price could rise to $3,200 per ounce by the end of 2025, assuming a normalized position scenario of an average 70 tonnes of purchase a month.
On the other hand, if the Federal Reserve maintains its interest rate, gold could reach $3,060 per ounce in the same period.
Goldman Sachs still maintains their “Go for Gold” recommendation, but also said that a stabilized market could lead to a tactical pullback in prices, making long-term positions remain nebulous.
However, with the looming trade conflict, Fed subordination risks, and threats of recession, the gold price could shoot up to the upper end of Goldman’s high-uncertainty range, the bank added.
Furthermore, the American investment bank also sees gold price to gain an extra 5% to $3,250 per ounce by December under the circumstance of rising concerns over U.S. fiscal sustainability.
Speculative positioning and ETF flows may also surge as fears of inflation and fiscal risks pressure investors. Meanwhile, central banks may increase their gold purchase as concerns over U.S. debt sustainability widen.
