In a recent interview, Daan Struyven - Head of Petroleum Research at Goldman Sachs - one of the world's largest and most influential investment banks and financial service institutions said that this investment bank still maintains a strong optimistic view on the precious metal.
We expect gold to increase by nearly 20% by the end of 2026, at around $4,900/ounce. Not as fast as this year - prices have increased by nearly 60% since the beginning of the year - but two drivers driving the increase in 2025, in our opinion, will continue to repeat in 2026 - he said.
The first driving force is the structural purchases of central banks. Since the central banks reserves have frozen in 2022, emerging market reserve managers have realized that they need to diversify to gold the only safe haven for domestic warehouses, the expert said.
The second driver is the US Federal Reserve's interest rate cutting cycle. Gold is a non-interest-bearing asset, so every time the Fed cuts interest rates, cash flows flow into gold ETFs, Struyven explained. Our economists predict the Fed will cut another 75 basis points. Combining two factors - buying from central banks and capital flows from private investors - gold is strongly supported".
When asked how the recent recovery of the US dollar has affected gold price forecasts, Struyven said a broader diversification trend could emerge.
Currently, only central banks are participating in this wave. But if the private sector also expands to diversify into gold, that could create more room for gold to increase prices, exceeding our optimistic forecast," he said.
Struyven explained that the gold market is relatively small. The size of global gold ETFs is up to 70 times smaller than the US Treasury market, so just a small portion of capital flow away from the bond market to move to gold is enough to create a strong rally.
For this reason, he said gold is currently Goldman Sachs' top buying recommendation in the commodity group. You have an attractive increase right in the base scenario. And if the market is less active - for example, concerns about the fiscal situation or the independence of the Fed - gold can function even better."
On October 6, Goldman Sachs raised its 2026 gold price forecast from $4,300 to $4,900 an ounce, expecting the increase to be driven by strong capital flows into Western ETFs and sustainable buying demand from central banks.
We believe that the risk for this new forecast is still leaning towards the possibility of prices continuing to exceed expectations, because the diversification of the private sector to the small gold market could increase ETF holdings higher than what our interest rate model expects, the analysis team wrote. Goldman expects ETF holdings to increase as the Fed cuts operating interest rates by another 100 basis points in the second quarter of 2026.
Goldman also forecasts central banks will buy an average of 80 tonnes of gold in 2025 and 70 tonnes in 2026, as emerging countries continue to diversify their reserves and reduce their dependence on the US dollar.
Spot gold prices have increased by nearly 60% since the beginning of the year thanks to strong central bank buying, increased demand for gold ETFs, a weak USD and growing interest from individual investors seeking to protect against trade and geopolitical risks.
"On the contrary, short-term speculative activities fluctuated strongly but were generally stable. After a major rally in September, Western ETF holdings have now caught up with the level our rate model predicted, suggesting that the recent rally is not an excess" - the analysis team commented.
