Gold Prices to Reach $4,900 by End-2026 on Central Bank Buying

Gold prices are expected to continue their rally and may reach $4,900 an ounce by the end of 2026, according to Goldman Sachs Research. The investment bank attributes this forecast to sustained central bank purchases, which have become a key structural support for gold prices. Central banks have been increasingly buying gold to diversify their foreign exchange reserves and reduce exposure to assets vulnerable to geopolitical or financial restrictions.

Goldman Sachs expects central banks to purchase an average of 50 tonnes of gold per month in 2026, up from the pre-2022 average of around 17 tonnes. The bank's analysts, Lina Thomas and Daan Struyven, believe that elevated central bank accumulation will remain a multi-year trend as countries seek protection against geopolitical and financial risks.

Gold prices have been highly volatile this year, hitting a record high of $5,600 an ounce in January before falling below $4,000 by mid-July. The metal has since staged a strong recovery, gaining nearly 15 percent from the July lows. However, Goldman Sachs warns that renewed expectations of US Federal Reserve rate hikes could trigger sharper corrections as traders unwind hedges.