Goldman Sachs Sees $4,900 Gold Price Target Amid Central Bank Buying Frenzy

Gold prices are expected to surge to $4,900 per troy ounce by year-end, according to Goldman Sachs. The bank's commodities team predicts a 3.65% increase from its current price, driven in part by central banks' continued gold buying spree.

The average monthly gold purchases by central banks are projected to reach 50 tonnes, representing a significant jump of about 300% from pre-2022 levels. This trend is expected to continue as governments diversify their reserves to mitigate geopolitical and financial risks, according to Goldman Sachs analysts Lina Thomas and Daan Struyven.

The bank also points to the Fed's interest rate expectations as a supporting factor for gold prices. With rates expected to remain steady or fall, gold tends to perform better compared to yield-bearing assets like bonds.