Goldman Sees $4,900 Target as Central Banks Boost Reserve Buying

Gold futures have been on a rollercoaster ride lately, but Goldman Sachs strategists remain bullish on the metal's future. Despite a recent pullback of over 3% after Fed Chair Kevin Warsh signaled further interest rate increases may be needed to combat inflation, gold prices are still expected to reach $4,900 per troy ounce by the end of 2026.

Goldman analysts point to two key factors driving their prediction: accelerating central bank purchases and waning expectations for aggressive Fed tightening. They expect central banks to buy an average of 50 tonnes of gold per month in 2026, a significant increase from the 17-tonne monthly average seen before 2022.

Rising demand for gold call options is also seen as a sign that investors are seeking portfolio hedges against large-scale shifts in government policy. Data from Barchart shows that gold has recently overtaken the US dollar as the largest global reserve asset, underscoring the de-dollarization theme driving gold's multi-year rally.