Gold extended its rally on Tuesday, briefly touching a new peak of $3,977.19 per ounce before easing to around $3,960 as of 0130 GMT, with year-to-date gains now at 51%. The surge has been fueled by robust central bank buying, renewed appetite for gold-backed exchange-traded funds (ETFs), a softer dollar, and safe-haven demand from retail investors amid heightened trade and geopolitical tensions.
Against this backdrop, Goldman Sachs on Monday raised its December 2026 gold price forecast to $4,900 per ounce from $4,300. The Wall Street bank cited “strong Western ETF inflows and likely central bank buying” as the main drivers, adding: “We see the risks to our upgraded gold price forecast as still skewed to the upside on net, because private sector diversification into the relatively small gold market may boost ETF holdings above our rates-implied estimate.”
Looking ahead, Goldman expects central bank purchases to average 80 metric tons in 2025 and 70 tons in 2026, with emerging market institutions continuing their structural shift into gold reserves. On the investment side, analysts anticipate Western ETF holdings to expand further as the U.S. Federal Reserve is projected to lower the funds rate by 100 basis points by mid-2026.
The bank also noted that speculative positioning has remained steady: “Following the large September increase, the level of Western ETF holdings has now fully caught up with our U.S. rates-implied estimate, suggesting the recent ETF strength is not an overshoot.”
Meanwhile, Wall Street closed mixed on Monday, with the S&P 500 up about 0.3% and the Nasdaq climbing 0.7%, while the Dow Jones Industrial Average slipped marginally.
