Goldman Sachs' head of oil research, Daan Struyven, stated that gold prices could reach $4,900 per ounce next year, driven by sustained demand from central banks and ETF buyers. However, he noted that even a slight shift in retail investors' asset allocation toward gold could trigger a more significant price surge.

In an interview with Bloomberg TV on Wednesday, Struyven revealed Goldman Sachs' historically bullish stance on gold. "We forecast nearly a 20% rise in gold prices by the end of 2026, targeting $4,900 per ounce," he said. "While this growth is slower than this year’s nearly 60% surge, the two key drivers behind 2025’s rally are expected to persist into 2026."

The primary driver is structurally higher gold purchases by central banks. "Since the freezing of Russia’s central bank reserves in 2022, emerging market reserve managers have received a stark warning: they must diversify their assets into gold. Once stored in domestic vaults, gold becomes the only truly safe asset," Struyven explained.

The second key driver stems from the Federal Reserve’s rate-cutting cycle. "Lower interest rates will boost inflows into gold ETFs, as gold is a non-yielding asset," he said. "Our economists predict the Fed will cut rates by another 75 basis points, meaning gold will benefit from both central bank purchases and private investor demand."

When asked whether the recent resilience of the U.S. dollar might impact gold forecasts, Struyven responded, "The diversification theme has room to expand beyond central banks. If private investors join in, it could create even greater upside beyond our already bullish outlook."

He further elaborated, "The key reason private-sector diversification could drive prices higher is gold’s relatively small market size. Global gold ETFs are just 1/70th the size of the U.S. Treasury market. Even minor outflows from bonds could significantly lift gold prices."

Struyven added that this is another reason gold remains Goldman Sachs’ top commodity pick. "Our base case already suggests substantial upside, but in scenarios where markets underperform—such as fiscal concerns or doubts about Fed independence—gold could outperform even our optimistic projections."

On October 6, Goldman Sachs raised its 2026 gold price forecast from $4,300 to $4,900 per ounce, citing strong Western ETF inflows and continued central bank purchases.

"Risks to our revised forecast remain skewed to the upside, as private-sector diversification into gold—a niche market—could push ETF holdings beyond our interest rate-based estimates," Goldman analysts wrote. The bank expects Western ETF holdings to rise steadily if the Fed cuts rates by 100 basis points by Q2 2026.

Goldman also projects central bank gold purchases will reach 80 tons in 2025 and 70 tons in 2026, emphasizing that emerging market central banks will continue shifting reserves from dollars to gold.

Supported by robust central bank demand, rising ETF inflows, a weaker dollar, and retail investors hedging trade and geopolitical risks, spot gold has surged nearly 60% this year.

"Meanwhile, speculative positioning remains stable overall. After a sharp increase in September, Western ETF holdings now align perfectly with our U.S. rate-based estimates, indicating recent ETF strength is not an overshoot," analysts added.