Goldman Sachs Reaffirms $5,400 Gold Price Forecast Despite Rate Hikes
Goldman Sachs has reaffirmed its long-term bullish outlook on gold prices, despite recent interest rate hikes from the Federal Reserve. According to Goldman Sachs, gold prices are expected to reach $5,400 per ounce by the end of 2027. The bank attributes this forecast to the significant increase in central bank demand for gold, with an average of about 91 tons purchased per month since 2022.
This is a notable shift from the pre-2022 average of just 17 tons per month. Goldman Sachs points out that central banks are driving up gold prices through their buying momentum. Additionally, demand for gold call options is supporting price increases as a macroeconomic hedge.
The current open interest in GLD call options stands at approximately 2.3 million contracts, which is roughly three times the historical average. Goldman Sachs has also lowered its estimate of gold's fair value at the end of 2026 to $4,650 per ounce, but this is still above the current spot price of about $4,350.
The bank expects the Fed to implement three interest rate cuts between September 2027 and March 2028. While short-term rate hikes may put pressure on demand for gold ETFs, Goldman Sachs believes that central bank buying will offset this impact.