Goldman warns of gold investment risks after another record high for the precious metal
Despite the price above $4600 per ounce and the rush of demand, the investment giant's strategists doubt the reliability of this safe haven
Gold prices on January 14 once again hit a record / Photo: Shutterstock.com
Strategists of the investment bank Goldman Sachs warned investors buying gold in search of a "safe haven" against excessive optimism. After the precious metal has risen sharply over the past year, the bank is skeptical about its role as a tool for portfolio diversification.
Details
In a 2026 forecast, Goldman Sachs' wealth division warned that historically "gold has experienced deep and prolonged drawdowns of up to 70%," MarketWatch writes. Goldman's head of tactical asset allocation, Brett Nelson, noted that over 20-year intervals, the precious metal protected against inflation only half the time. At the same time, U.S. stocks at similar intervals have always outperformed price growth, Nelson said.
What's happening in the market
On January 12, when the price of gold once again updated the historical maximum, investors again began to buy derivatives on the precious metal: in one day they invested $ 950 million in a popular investment exchange-traded fund (ETF) SPDR Gold Shares, whose securities are 100% backed by gold, reports MarketWatch with reference to the data FactSet. Since the beginning of 2026, quotes of this ETF have risen more than 6%, outperforming the U.S. stock market, after a record jump of almost 64% in 2025 since the launch of the fund.
On January 14, gold prices set a new record, exceeding the mark of $4630 per troy ounce amid the increasing popularity of protective assets. Demand for the "safe haven" grew due to renewed concerns about the independence of the U.S. Federal Reserve on the news of a criminal investigation against the head of the U.S. central bank Jerome Powell. Geopolitical risks also remain high, with markets watching Washington's possible intervention in the political crisis in Iran, Trading Economics reports.
Context
Wells Fargo said this week that it sees potential upside for gold in 2026 due to heightened geopolitical tensions and aggressive purchases of the precious metal by central banks around the world. Expected Fed rate cuts and a stable dollar will also contribute to the positive dynamics of gold, although at a slower pace than in 2025, according to Wells Fargo.
This article was AI-translated and verified by a human editor
