Goldman Sachs Reaffirms its $4,900 Gold Forecast for 2026

Earlier this month, Goldman Sachs analysts released a note indicating that gold is slated to end this year selling at $4,900 for each ounce. This week, the bank released another research note reaffirming their earlier forecast and explaining their view of how bullion’s market could play out over the remaining months of 2026.

The analysts say central bank accumulation of gold is continuing to provide an ever-rising price floor for the precious metal. According to official estimates, central banks bought 44 tons of gold this July, which was way higher than the 17-ton monthly average volume that used to be purchased by these institutions before 2022.

Goldman Sachs also points out that these official figures often underreport the actual scale of central bank purchases of the precious metal. The analysts estimate that China alone added about 35 tons of gold to its reserves in July, a figure that nearly doubles the amount that the country reported in its official disclosures to the public.

The investment bank has its own gold tracking model that tracks how much gold is being moved on the OTC market in London and into vaults operated domestically in different countries or is moved into other third-party vaults or custodial services. These transactions provide a more accurate estimate of how much gold different central banks are adding to their reserves while the public disclosures understate the true volume.

Goldman Sachs says this central bank accumulation is likely to continue for several years at the very least as de-dollarization, hedging against geopolitical risks, and concerns about fiscal policy sustainability in key countries like the U.S. remain elevated.

The bank’s analysts say there is a likelihood of the price climbing a lot higher than their year-end projection. One reason they give to support this possibility is that investors currently hold a small fraction of gold in their portfolios. If a trigger, such as a major change in government policy, emerges prompting them to seek a safe haven to hedge against the risk, gold prices could swing upwards quickly and overshoot the year-end price target set by the bank.

Goldman Sachs also points out that the market could experience a sharp correction if any of the current headwinds, such as rate hike expectations, stay elevated and the Fed announces more hikes before the year ends.

In such a scenario, investors could unwind their long positions and cause gold prices to go into a sharp correction. If that happens, gold could end the year averaging $4,400 an ounce, which would be higher than current prices but way below the bank’s year-end target.

All in all, Goldman Sachs is certain that the structural setup of the gold market is strongly bullish, but short-term factors could introduce high volatility that could make prices swing either way on a dime. Gold industry stakeholders like Collective Mining Ltd. (NYSE American: CNL) (TSX: CNL) therefore need to keep a close eye on the different market drivers so that they catch any changes quickly and tweak their strategies accordingly.

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