Gold’s sideways drift since February should not be read as the end of the bull market, according to Anthony Kim, Goldman Sachs’ Global Head of Metals Trading. Speaking on the bank’s The Markets podcast, Kim argued that the metal’s all-time high of $5,589.38 an ounce, reached in late January, does not mark the top of the current cycle rather, the market is working through what he called an extended pause.
Why the pause has dragged on
Kim pointed to two forces behind the seven-month-plus consolidation. The first is uncertainty around the Fed’s incoming leadership: with Kevin Warsh nominated and confirmed as the new Fed chair, traders are still trying to gauge his policy leanings, particularly given the Trump administration’s vocal views on monetary policy.
The second factor is the Iran conflict and its disruption to global energy markets, which has in turn scrambled the usual pattern of reserve recycling into precious metals. Kim noted that positioning across large parts of Goldman’s client base had fallen sharply as a result, though central bank buying has remained one of the few flows that hasn’t let up.
Despite the disruption, Kim maintained that the broader uptrend remains intact and that fresh records lie ahead once conditions normalize.
Fiscal concerns and currency debasement
Kim also addressed how much high yields are weighing on gold as a competing asset. He described an ongoing multi-year trend of fiat currency losing value relative to gold, and suggested that if concerns about fiscal sustainability — not just in the U.S. but in Japan too become the dominant driver of allocation decisions, the usual inverse relationship between yields and gold could start to break down. In that scenario, rising long-end yields driven by fiscal worry could actually push more capital into gold rather than away from it.
For now, he said the traditional rate-gold relationship still mostly holds domestically, even as the longer-run picture grows murkier.
Recent U.S. policy moves were cited as a key part of that narrative, including currency-market intervention around the dollar-yen pair and Treasury buybacks at the long end of the curve aimed at reshaping yield dynamics. Kim suggested that official intervention of this kind tends to drive investors toward gold, and noted that client activity had stayed unusually brisk through the summer spanning the July Fed meeting, subsequent policy interventions, and the Jackson Hole symposium with many clients layering on and adjusting convexity trades as new data arrives.
Eyes on August CPI
Looking ahead, Kim said the August inflation print the final major data point before the Fed’s September rate decision will be critical. He’s watching closely to see whether markets price in a September hike and flatten the curve accordingly, or whether uncertainty about the Fed’s reaction function persists instead. That data, he said, will help clarify which direction gold is likely to lean next.
Kim reiterated Goldman’s bullish stance, while cautioning that the market still needs post-Jackson Hole data to confirm the Fed’s next move. He described $4,000 an ounce as a solid technical floor, underpinned by sovereign and institutional buying interest at that level. His guidance to investors: use any volatility around upcoming data releases, particularly as prices approach $4,000, as an opportunity to build long positions ahead of the FOMC decision.
Goldman Research: $4,900 target for 2026
The commentary follows a September 2 note from Goldman Sachs Research analysts Lina Thomas and Daan Struyven, who forecast gold reaching $4,900 an ounce by the end of 2026. Their outlook rests heavily on continued central bank diversification away from traditional reserve currencies, alongside markets paring back expectations for further U.S. rate hikes next year.
The research team projects central banks will average 50 tonnes of monthly gold purchases in 2026 nearly three times the pre-2022 average of 17 tonnes. Their nowcast shows sovereign buying already accelerating to a three-month seasonally adjusted pace of 100 tonnes in June 2026, up from 66 tonnes in May, with China identified as the largest confirmed buyer that month.
Cooling rate-hike expectations were flagged as another tailwind, with the analysts pointing to an expected easing of Fed-related headwinds as inflation trends lower and keep the central bank on hold.
The note also flagged upside risks beyond the base forecast: gold remains under-owned in private portfolios relative to central bank holdings, and geopolitical strain including the Iran situation could push private investors toward greater diversification, especially amid growing doubts about Western fiscal discipline.
Derivatives adding volatility
Thomas and Struyven also highlighted a structural shift in how investors are hedging policy risk increasingly through gold call options which could amplify price swings in both directions. As gold approaches key option strike prices, dealers who sold those calls are forced to buy gold to hedge their exposure, reinforcing rallies. The reverse is also true: falling prices can trigger dealers to unwind hedges by selling gold, deepening declines.
Notably, Goldman’s $4,900 year-end target does not factor in this derivatives-driven demand, meaning the bank sees skew to the upside paired with a warning of sharper volatility in both directions as the rally progresses.
