Goldman Sachs Sees Gold Prices Soaring to $4,900 by 2026

Gold prices have surged nearly 30% in the last year, but Goldman Sachs is predicting further growth. The firm expects gold to reach $4,900 per troy ounce by the end of 2026, a 3.65% increase from current levels.

The analysts at Goldman Sachs cite growing demand from central banks as they diversify their reserves and scale back expectations for U.S. rate hikes in 2026 as reasons for the target. Central banks are expected to purchase an average of 50 tonnes of gold per month in 2026, up from an average of 17 tonnes per month before 2022.

Gold's share in private portfolios remains low, and recent geopolitical developments may accelerate diversification beyond central banks to private investors. This could lead to a rise in demand for gold call options as investors hedge their portfolios against large-scale changes in government policies.

Barchart has also reported that gold has overtaken the U.S. Dollar as the largest global reserve asset. Meanwhile, scaled-back expectations for a U.S. rate hike contribute positively to gold prices, which tend to struggle when interest rates rise.