Goldman Sachs Stands Firm on $5,400 Gold Price Target Amid Rate Hikes
Goldman Sachs' global commodities research team still expects gold prices to reach $5,400 by the end of 2027, despite the recent interest rate hike by the Federal Reserve. According to a report from Goldman Sachs on September 18, tightening policies will only slow the short-term upward momentum of gold, but not end its long-term bullish trend.
The report highlights that central bank gold purchases are driving the structural trend in gold prices. With current monthly purchases exceeding 91 tons, five times the historical average, and no signs of reversal, Goldman Sachs believes this trend will continue to support gold prices.
Additionally, the open interest in call options is three times the historical average, indicating concerns about fiscal sustainability among G10 countries are driving demand for gold as a macro policy hedging tool. Goldman Sachs estimates that every additional 100 tons of assured demand could lead to a price increase of about 6.8%.