Gold prices will reach $4,900/ounce next year thanks to sustained demand from central banks and ETF investors, but just a small portion of the diversified cash flow from individual investors can help prices increase even more strongly. This is a comment of many financial institutions on the gold market in the coming time.
Recently, Deutsche Bank (DBKGn.DE) - Germany's largest bank - raised its gold price forecast for 2026 to 4,450 USD/ounce from 4,000 USD on Wednesday.
The bank now expects gold prices next year to range between $3,950 and $4,950, with a price ceiling of about 14% higher than the current December 2026 gold contract price on the COMEX.
The reason for this assessment is because Deutsche Bank believes that investment capital flows are stabilizing and demand is persistent from central banks.
In addition, Mr. Daan Struyven, Head of Petroleum Research at Goldman Sachs, also recently made a forecast for gold prices in an interview with Bloomberg TV.
Struyven said the investment bank remains strongly optimistic about the precious metal.
We expect gold to increase by nearly 20% by the end of 2026, reaching $4,900/ounce, he said. Not as fast as it has been this year as gold has increased by nearly 60% so far but the two main drivers of the 2025 rally, as far as we know, will continue to repeat in 2026.
The first driver is higher institutional gold purchases by central banks.
Since the Russian central banks reserve assets were frozen in 2022, reserve managers in emerging markets have realized that they need to diversify to gold the only truly safe asset when held in domestic warehouses, he said.
The second driver is the Fed's interest rate cutting cycle.
When asked if the US dollar has strengthened in recent weeks has affected gold price forecasts especially when transaction to avoid currency depreciation was an important factor Struyven replied:
I think the topic of diversification can expand further it is currently mainly limited to central banks. But if it expands to the private sector, it will create significant upward momentum for gold."
He further explained: The main seeing point behind the potential for price increases from private sector diversification is the relatively small gold market. If we look at global gold ETFs, their value is about 70 times smaller than the US Treasury bond market, so just a small portion of the diversified capital flow from global bond markets can push gold prices up sharply".
According to Struyven, this is also the reason why gold is currently Goldman Sachs' top investment recommendation in the long-term commodity group. In the base scenario, gold has significant upside potential; in the unfavorable market scenario for example, concerns about budget deficits or the independence of the Fed gold will perform even better.
On October 6, Goldman Sachs raised its 2026 gold price forecast from $4,300 to $4,900 an ounce, saying further momentum will come from strong ETF inflows in the West and sustainable gold purchases by central banks.
Goldman also forecasts central banks will buy an average of 80 tonnes of gold in 2025 and 70 tonnes in 2026, and believes that central banks in emerging markets will continue to diversify their reserves away from the US dollar and into gold.
Since the beginning of the year, spot gold prices have increased by nearly 60%, thanks to strong net buying by central banks, increased demand for gold ETFs, weaker USD, and increased interest from individual investors seeking to protect against trade and geopolitical risks.
On the contrary, short-term speculative activities are still quite stable. After a strong increase in September, ETF holdings in the West have now fully caught up with the estimate implied by US interest rates, showing that recent ETF strength is not a phenomenon of peaking" - analysts said.
