Goldman Sachs holds $4,900 gold forecast as central bank buying fuels rally

Goldman Sachs The Goldman Sachs Group, Inc. ↗ 3.34% has reaffirmed its forecast for gold to reach $4,900 per troy ounce by the end of 2026, underpinned by persistent central bank purchases and a structural sensitivity in the gold market that amplifies even small shifts in investor allocation.

A Market Built on Scarcity

The bank's analysts, Lina Thomas and Daan Struyven, argue that gold remains a "niche asset" in Western portfolios despite its enormous nominal market size. Goldman Sachs estimates that for every 0.01 percentage point increase in gold's share of U.S. investment portfolios, prices could rise by approximately 1.4%. Gold ETFs accounted for just 0.17% of U.S. private financial investment portfolios as of December 2025, well below the 2012 peak.goldmansachs+1

The $4,900 target, first set in October 2025 when Goldman raised it from $4,300, was subsequently cut from $5,400 in June 2026 after a Fed-induced selloff brought prices back toward $4,100. The current forecast does not incorporate elevated demand for hedges through gold derivatives, which Goldman says could push prices above its target but also introduce "greater two-sided volatility".reuters+2

Central Banks as the Structural Buyer

Central bank demand has been the defining feature of the gold market in recent years. The World Gold Council reported net purchases of 244 metric tons in the first quarter of 2026 alone, exceeding both the prior quarter and the five-year average. The National Bank of Poland led buyers with 31 tons, while the People's Bank of China added 7 tons.gold

Reuters reported in mid-August that gold had jumped roughly 10% since the start of that month after stalling near $4,000 for several weeks, with central banks "spearheading" a renewed rally. Goldman expects central bank buying to average 70 metric tons per quarter through 2026.reuters+1

The Currency Devaluation Trade

The rally's backdrop includes what analysts call the "currency devaluation trade" — investors betting that policymakers will ultimately alleviate U.S. debt stress by tolerating inflation and eroding the dollar's purchasing power. Federal Reserve Chairman Kevin Warsh addressed the Jackson Hole symposium on Friday, telling attendees that the Fed has "work to do" if above-target inflation persists, remarks that markets will parse for implications on monetary policy and gold's appeal as a hedge.bitget+2

JPMorgan ↗ 1.64%, which forecasts gold averaging $6,000 per ounce in the fourth quarter of 2026, has estimated that a 0.5% shift of foreign-held U.S. assets into gold — roughly $70 billion annually — could push prices up about 18% per year under current liquidity conditions.jpmorgan+1

Whether gold reaches these targets depends on whether investor attention remains fixed on U.S. fiscal concerns or rotates toward competing narratives, including geopolitical tensions and the artificial intelligence investment cycle.bitget