The sharp correction in gold prices in the past four months does not mean that the upward cycle of the precious metal has ended. Goldman Sachs still maintains its optimistic view, believing that persistent buying from central banks will be the driving force to bring gold prices closer to the 5,000 USD/ounce mark.
In the latest research report, Ms. Samantha Dart - Co-Head of Global Commodity Research at Goldman Sachs - affirmed that the current adjustment is only short-term.
The upward momentum of gold has not ended. We continue to expect gold prices to continue to rise thanks to structural drivers and then cyclical factors," she said.
According to Goldman Sachs, the most important foundation supporting gold's outlook is still the buying demand from central banks, especially in emerging economies.
The trend of diversifying foreign exchange reserves after Russia's reserve assets were frozen in 2022 is still the basis for forecasting gold prices to reach 4,900 USD/ounce by the end of 2026," Ms. Dart said.
The bank also cited the latest survey results of the World Gold Council (WGC), in which 45% of the 76 central banks surveyed said they plan to continue to increase gold reserves in the next 12 months - the highest level since the survey was conducted.
However, Goldman Sachs admits that gold is still under pressure in the short term as the tough stance of the US Federal Reserve (Fed) weakens the attractiveness of the precious metal. Along with that, expectations that interest rates continue to remain high make capital flows into gold ETFs unable to recover.
However, this bank believes that the above resistance will gradually weaken over time. Goldman Sachs still maintains the view that the Fed will maintain interest rates this year before starting a re-easing cycle in the second half of 2027. That scenario is expected to create conditions for capital to return to gold ETF funds.
In the medium term, risks to gold price forecasts still lean towards increase," Ms. Dart emphasized, while saying that concerns about fiscal sustainability in developed economies will continue to drive private investors to increase gold holdings.
To reflect the reality of the market more closely, Goldman Sachs has significantly adjusted the gold demand estimation model of central banks.
In March, the bank raised its net gold buying forecast for the official sector to about 50 tons per month, calculated on a 12-month moving average, instead of the old method of 29 tons. Currently, Goldman Sachs expects central banks to buy an average of about 60 tons of gold per month throughout 2026, thanks to the continued demand for reserve diversification in the context of global geopolitical instability.
According to analysts, previous estimates underestimated the formal sector's gold buying demand since August 2025 because UK trade data did not fully reflect the amount of gold withdrawn from stockpiles in London, causing part of the gold buying activity of central banks not to be statistically analyzed.
Goldman Sachs believes that the foundational factors supporting gold are still very solid. Besides the trend of increasing central bank reserves, geopolitical fluctuations will also continue to boost the demand for gold holdings from both the public sector and private investors in the coming time.
This investment bank continues to maintain its gold price target of 5,400 USD/ounce by the end of 2026. However, Goldman Sachs also noted that in the short term, gold prices may still be under pressure if investors have to sell highly liquid assets to replenish cash in periods of strong market volatility.
