Bengaluru – Goldman Sachs on Oct 6 raised its December 2026 gold price forecast to US$4,900 per ounce from US$4,300, citing strong Western exchange-traded fund (ETF) inflows and likely central bank buying.
“We see the risks to our upgraded gold price forecast as still skewed to the upside on net, because private sector diversification into the relatively small gold market may boost ETF holdings above our rates-implied estimate,” Goldman said.
Spot gold was trading around US$3,960 per ounce as at 0130 GMT on Oct 7, after hitting a fresh high of US$3,977.19 earlier in the day.
Gold, traditionally seen as a refuge from political and economic uncertainty, has soared 51 per cent in 2025 on strong central bank buying, increased demand for gold-backed ETFs, a weaker US dollar and growing interest from retail investors seeking a hedge against rising trade and geopolitical tensions.
Goldman expects central bank buying to average 80 tonnes in 2025 and 70 tonnes in 2026, saying emerging market central banks are likely to continue the structural diversification of their reserves into gold.
China’s central bank added gold to its reserves in September for the 11th straight month, official data from the People’s Bank of China (PBOC) showed on Oct 7.
China’s gold reserves rose to 74.06 million fine troy ounces at the end of September from 74.02 million ounces at the end of August.
Its gold reserves were valued at US$283.29 billion (S$365.6 billion) at the end of September, up from US$253.84 billion at the end of August, the PBOC said.
“A strong figure would reinforce the idea that China is keen to de-dollarise and accelerate its actions in that space,” independent analyst Ross Norman said.
“Further purchases, even modest ones, will be seen domestically as positive for a price-sensitive market. It may narrow the significant discounts at Loco Shanghai. It will give investors, ETF buyers and institutions confidence that gold will continue rising.”
Analysts at Goldman Sachs said Western ETF holdings are expected to rise as the US Federal Reserve is seen lowering the funds rate by 100 basis points by mid-2026.
“In contrast, noisier speculative positioning has remained broadly stable. Following the large September increase, the level of Western ETF holdings has now fully caught up with our US rates-implied estimate, suggesting the recent ETF strength is not an overshoot,” it said. REUTERS
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