Goldman Sachs Predicts $5,400 Gold Price by Year-End

The investment firm Goldman Sachs has set its year-end gold target at $5,400. For those looking to bet on this prediction without paying a premium, the cheapest option is the SPDR Gold MiniShares Trust (NYSEARCA:GLDM). This fund tracks spot gold net of fees and charges just 0.1% per year.

Goldman's forecast implies upside north of 20% from current prices. The target was made despite a sharp drop in gold prices earlier this year, from above $5,600 in January to near $4,000 in mid-July.

The firm attributes its prediction to sustained central bank buying and Western ETF inflows. Central banks outside the G7 have been accumulating physical gold at a rapid pace, driven by their need to diversify away from the dollar. This flow is price-insensitive, meaning it will continue regardless of short-term price fluctuations.

Western ETF flows are also driving the demand for gold. After years of outflows during the zero-rate era, physically backed gold funds have begun drawing money back in faster than Goldman had modeled. These inflows show up directly in GLDM, which holds allocated bullion in a London vault.