Goldman Sachs has raised its gold price forecast for December 2026 to $5,400 per ounce, citing a powerful shift in global investment behaviour as private investors increasingly follow central banks in diversifying into gold.
The revised outlook represents a more than 10% upgrade from the bank’s previous target of $4,900/oz, set just weeks ago. According to Goldman, the move reflects growing conviction that gold is becoming a core strategic asset rather than a short-term hedge.
In a note released on Wednesday, analysts Daan Struyven and Lina Thomas said the higher forecast is driven by “sticky” private-sector demand, as investors who bought gold to protect against macroeconomic and policy risks are expected to maintain their positions through 2026.
Unlike past gold hedges tied to specific events — such as the November 2024 US election — current positioning is aimed at deeper concerns, including fiscal sustainability, currency debasement, and long-term monetary policy risks. These risks, Goldman noted, are unlikely to be resolved in the near term.
Central Banks Continue Structural Shift into Gold
Goldman Sachs expects emerging-market central banks to maintain strong gold buying as part of an ongoing structural diversification of foreign-exchange reserves. Central-bank purchases are forecast to average 60–70 tonnes per month in 2026, far above the pre-2022 average of just 17 tonnes.
The analysts highlighted three key drivers behind sustained central-bank demand:
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The freezing of Russia’s foreign reserves in 2022, which fundamentally changed perceptions of geopolitical risk.
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Relatively low gold allocations among major emerging-market central banks, including China’s PBoC.
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Record-high central-bank appetite for gold, according to recent surveys.
Goldman estimates that central-bank buying alone could account for around 14 percentage points of gold’s projected price increase by the end of 2026.
Private Investors Add Fuel to the Gold Bull Market
The diversification trend is no longer limited to official institutions. Goldman notes that high-net-worth families, physical bullion buyers, and options investors are increasingly turning to gold amid concerns over long-term fiscal and monetary trajectories in major economies.
Western gold ETF holdings have already increased by approximately 500 tonnes since early 2025, outpacing expectations based purely on US interest-rate cuts. Goldman also expects an additional 50 basis points of Federal Reserve easing in 2026, which should further support precious metals.
“Risks to our updated forecast are significantly skewed to the upside,” the analysts said, warning that further private-sector diversification could intensify competition for physical bullion between investors and central banks.
Goldman pointed out that gold remains under-allocated in private portfolios, with gold ETFs accounting for just 0.17% of US financial assets, still below the 2012 peak. The bank estimates that every 1 basis-point increase in gold’s share of US portfolios could lift the gold price by around 1.4%.
Gold Tops Goldman’s Commodity Outlook
In its 2026 Commodities Outlook, Goldman Sachs reiterated that gold remains its single most bullish commodity call, supported by geopolitical tensions, the US-China rivalry in AI and technology, and ongoing monetary easing.
While the bank sees a supportive macro backdrop of steady global GDP growth and lower interest rates, it also stressed the growing importance of commodities — particularly gold — as portfolio insurance in an increasingly fragmented geopolitical landscape.
“Equity-bond portfolios are not well diversified when commodity supply disruptions drive both higher inflation and weaker growth,” the analysts cautioned, underscoring gold’s role as a strategic hedge in a multi-year bull market for precious metals.
