Gold Prices Plummet 5.5%, Despite Goldman Sachs' 10% Upside Forecast

Gold prices (CM:XAUUSD) plummeted by 5.5% from their three-month high of $4,697 to around $4,375 on September 1.

The decline was triggered by new bets on Federal Reserve rate hikes, which negatively impact non-yielding assets like gold.

Despite the recent downturn, Goldman Sachs (GS) still projects a 10% upside for gold prices by the end of 2026, with a target price of $4,900.

This forecast is based on steady central bank buying, which serves as the primary driver for long-term gains in gold.

Goldman Sachs expects central banks to purchase an average of 50 tons per month in 2026, up from 17 tons per month before 2022, citing their need to spread out reserves and protect against geopolitical risks.