Gold Prices Rebound as Goldman Sachs Sees 10% Upside

Gold prices have taken a hit in recent days, dropping by 5.5% from their three-month high of $4,697 to trade near $4,375 on September 1.

The decline was largely attributed to bets on Federal Reserve rate hikes, which can hurt non-yielding assets like gold.

Despite this drop, Goldman Sachs is sticking to its forecast of a $4,900 price target for the end of 2026, representing a 10% upside from current levels.

This projection comes as central bank buying continues to drive long-term gains in gold, with Goldman Sachs expecting an average monthly purchase of 50 tons in 2026, up from 17 tons before 2022.

Central banks buy gold to spread out reserves and protect against geopolitical risks. Fidelity's money supply models also suggest a value near $5,000 for gold based on global M2 cash levels, which are currently 13% above current prices.