Goldman Sachs (GS) has raised its price forecast for gold citing strong central bank demand for the metal among a range of bullish drivers. The Wall Street bank lifted its gold price target to $3,100, with a potential rally to $3,300 if policy uncertainty remains high. The spot gold price (XAUUSD) was trading at $2,912, flat on the day as traders in the U.S. returned after the Presidents’ Day holiday.
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“Go for Gold”
Uncertainty over tariffs, ETF flows and expected Federal Reserve rate cuts are among the reasons GS is still bullish on gold after its 10% rally YTD and a series of record highs in 2025. Analysts are the bank also raised their assumed central bank demand forecast from 41 tons to 50 tons per month this year, noting that fiscal risks and inflation could prompt central banks with large Treasury holdings to buy more gold.
“‘We reiterate our ‘Go for Gold’ trading recommendation,” wrote GS analysts Lina Thomas and Daan Struyven.
UBS has also raised its gold price forecast to $2,900 per ounce by year-end, citing strong investor sentiment and macroeconomic uncertainty. Strategist Joni Teves also thinks gold prices could reach $3,200 later this year due to limited positioning and liquidity issues in the London market. She said the positioning, or lack of it, suggests “plenty of scope to add gold to portfolios.”
China’s pilot programme, which lets insurance companies invest in gold, may also spur prices higher.
Gold has been on a tear higher ever since the October 7th attacks injected a fresh dose of geopolitical risk premia to prices, while central banks have been eagerly buying gold amid signs of fiscal risks in the U.S.
December saw some small net selling of gold by central banks, according to the World Gold Council, albeit this was after significant purchases in previous months. Gold rallied over 25% in 2024, its best performance in 14 years.
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