In its latest report, Goldman Sachs has raised its gold price forecast for the end of 2025 to $3,300 per ounce, up from the previous $3,100. This adjustment is mainly due to stronger than expected ETF inflows and the anticipated continued demand for gold purchases by global central banks. Goldman Sachs analysts Lina Thomas and Daan Struyven had last month raised the gold price target to $3,100 per ounce, but as prices quickly broke the $3,000 barrier, Goldman was forced to revise its forecast upward once more.
In the latest report, Goldman not only raised the gold price target range to $3,250-$3,520 but also said that large Asian central banks will continue large-scale gold purchases over the next three to six years, driving global demand for gold. This year, official sector demand is expected to average 70 tons per month, up from the previous forecast of 50 tons.
Goldman analysts pointed out that after Russian foreign exchange reserves were frozen in 2022, many emerging market central banks increased their gold purchases, about five times their previous amount, reflecting a structural change in reserve management. Goldman expects this trend will not reverse in the short term.
Additionally, gold prices have risen by 15% this year, continuing last year's strong upward trend. The U.S. Federal Reserve's shift to an accommodative monetary policy in the latter half of last year, along with the uncertainty in Trump administration's foreign and trade policies, have led investors to seek gold as a safe haven asset.
Goldman expects that as the Federal Reserve continues to cut rates, funds will keep flowing into gold ETFs, further driving up gold prices. The firm also noted two potential risks that could push gold prices higher than expected: one is a Federal Reserve rate cut cycle triggered by an economic recession, which could raise gold prices to $3,410 per ounce; the other is increased investor demand for gold as a safe haven, potentially pushing prices to $3,680 per ounce.
Goldman reiterated its buy recommendation for gold and mentioned possible buying opportunities: a potential Ukraine-Russia peace agreement might lead to short-term selling of gold, and a major stock market crash might lead to gold liquidation, but Goldman believes these scenarios would have only a temporary impact on gold prices.
