Goldman Sachs has revised its gold price forecast for the end of 2025, increasing its target to USD 3,300 per ounce, up from a previous estimate of USD 3,100. The updated forecast range now stands at USD 3,250 to USD 3,520. This adjustment comes in response to unexpected inflows into gold exchange-traded funds (ETFs) and sustained, strong demand from central banks worldwide.
Despite ongoing global uncertainty, Goldman Sachs anticipates that central banks, particularly in Asia, will continue to rapidly accumulate gold over the next three to six years, working towards their projected gold reserve targets. The bank’s base case scenario assumes that speculative positions will normalize from their current elevated levels. However, the upper end of the forecast range reflects the possibility of continued tightness in gold holdings amid rising geopolitical and economic uncertainty.
The report also highlights that medium-term risks for gold prices are largely skewed to the upside. In more extreme scenarios, Goldman Sachs suggests that the price of gold could reach as high as USD 4,200 per ounce by the end of 2025.
Goldman Sachs reiterated its long-term bullish stance on gold, maintaining its recommendation for investors to hold long positions in the precious metal. However, the bank also noted two potential events that could present more attractive entry points for those looking to buy gold, though both remain uncertain at this stage.
The first scenario involves a potential peace agreement between Russia and Ukraine, which could lead to speculative selling of gold. Despite this, Goldman Sachs believes that such a peace deal would unlikely have a significant impact on the tight supply-demand dynamics in the gold market. Russian gold exports are reportedly higher than pre-sanction levels, and the freezing of Russian central bank assets has set a precedent that is likely to sustain high demand from central banks.
The second potential event is a steep sell-off in the stock market, which could prompt gold liquidation due to margin calls. However, Goldman Sachs emphasized that this scenario would likely be brief, as gold holdings would quickly recover in response to ongoing global uncertainty.
With a continued focus on central bank buying and geopolitical instability, Goldman Sachs remains confident in the long-term prospects for gold, even as it acknowledges short-term risks and potential volatility in the market.
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