"It's Not Out of Style Yet": Why Goldman Sachs Expects Gold to Rise 22%

Since the start of the year—after reaching a record high in late January—gold prices have already fallen by more than 7%, and since the start of the war in the Middle East, they have dropped by more than 20%. Nevertheless, analysts at Goldman Sachs believe that this trend does not signal the end of the precious metal’s price growth this year, according to Yahoo Finance.

“Gold hasn’t gone out of style yet,” said Samantha Dart, co-head of global commodities research at Goldman Sachs, in an analytical note on Sunday evening. The team of analysts confirmed that by the end of 2026, they expect gold to rise again to $4,900 per ounce. This target implies a 22% increase in gold prices relative to the most recent closing price.

Amid escalating tensions between the U.S. and Iran over the weekend, spot gold prices fell by more than 2% on Monday, June 29—ultimately closing the day at $4,015.9 per ounce. However, analysts at Goldman Sachs believe that despite gold’s recent poor performance, the precious metal has risen 120% since 2022—and this momentum, driven by “both structural and, ultimately, cyclical factors”—has not yet run its course.

Goldman Sachs cited “the ongoing diversification of emerging-market central banks’ reserves following the freeze on Russian reserves in 2022” as one of the structural factors supporting gold. From a cyclical perspective, analysts agreed that gold is facing short-term challenges: concerns about inflation and expectations of a “hawkish stance by the Fed” are having a negative effect. However, “over time, these headwinds will, at least in part, reverse,” Dart believes.

The bank expects the Fed to keep interest rates unchanged this year and to postpone the cycle of monetary easing until the second half of next year.

“In the medium term, the risks to our gold price forecast are generally skewed to the upside,” the analyst noted, emphasizing that broader macroeconomic trends will ultimately accelerate the diversification of private investments toward gold, particularly amid concerns about the sustainability of fiscal policy in Western countries.

Goldman Sachs set its year-end forecast for gold at $4,900 in June—prior to that, the bank had expected the price to reach $5,400 per ounce. Analysts lowered their expectations for the precious metal because the market no longer anticipates interest rate cuts in the U.S. in 2026.

Against this backdrop, the price of gold fell below $4,000 per ounce last week for the first time since last November.

At its most recent meeting on June 17, the Fed left interest rates unchanged; however, the views of Fed officials regarding the future trajectory of U.S. monetary policy were divided: nine board members indicated they expected at least one rate hike by the end of the year, while another nine expected rates to remain unchanged or be cut.

This article was AI-translated and verified by a human editor