Goldman Sachs has raised its gold price forecast for December 2026 to $5,400 per ounce, up from $4,900. The bank attributes this upward revision to increasing private sector allocations to gold and continued central bank demand, which it views as structurally driven.
Goldman highlights that private investors are moving beyond tentative interest in gold towards more sustained, strategic portfolio allocations. This shift reflects growing concerns about correlation risks, geopolitical uncertainty, and doubts over the long-term durability of the global disinflation trend. As a result, gold is increasingly seen not just as a tactical trade but as a core holding within diversified portfolios.
On the official sector side, Goldman expects central bank purchases to average 60 tonnes in 2026. These purchases are mainly driven by emerging market central banks engaged in structural reserve diversification, aiming to reduce reliance on traditional reserve currencies. This approach indicates that demand is less influenced by short-term price movements and more by long-term reserve management preferences.
The forecast upgrade also signals that Goldman anticipates a tighter balance between gold supply—which includes mine production and recycling—and incremental demand. Persistent central bank buying combined with growing private investor participation is expected to absorb available supply, even as speculative activity fluctuates. In other words, demand for gold is becoming “stickier,” supported by structural factors rather than temporary market dynamics.
For forex traders, this revised forecast suggests that gold’s upside will increasingly be underpinned by fundamental factors beyond short-term movements in interest rates or the US dollar. While near-term price action will continue to respond to changes in yields, inflation data, and risk appetite, Goldman’s view points to a stronger medium-term bid for gold. This could lead to shallower price dips during market corrections, provided central bank buying and private investor diversification persist.
Original Source: Eamonn Sheridan of investinglive.com
