Goldman Sachs has raised its year-end price forecast for gold to $3,700 per ounce due to strong exchange-traded fund (ETF) inflows and increased central bank purchases.
The bank’s analysts now expect official sector buying to average 80 tons per month in 2025, an increase from the previous forecast of 70 tons.
The revised outlook follows a price rally that saw gold hit a record high of $3,245 per ounce earlier this month.
According to Goldman Sachs, the uptick in ETF flows points to growing concerns over economic slowdown and volatility in risk assets.
The bank noted that investor behavior suggests a shift toward portfolio diversification and protection against potential recession.
With US economic indicators showing signs of weakening and trade policy uncertainty intensifying, Goldman said gold remains a preferred long position.
The bank’s economists currently assess a 45 percent probability of a US recession this year, adding that any further slowdown could accelerate institutional demand for bullion.
If recession risks materialize and ETF inflows continue to outpace expectations, Goldman estimates that gold could approach $3,880 per ounce by year-end.
The bank also highlighted the role of constrained mine supply and central bank holdings in limiting market liquidity, which could amplify future price movements.
The tightening supply environment, combined with geopolitical uncertainty, has increased interest in physical gold and gold-backed instruments.
Meanwhile, other market participants, including UBS, maintain a similarly bullish stance, forecasting continued gains into 2026. UBS expects sustained demand from macro funds, central banks and retail investors amid persistent global instability.
Gold’s performance has outpaced other asset classes in recent weeks, positioning it as a reliable hedge as investors reallocate capital away from equities and high-yield bonds.
With risk sentiment remaining fragile and demand fundamentals strengthening, gold is expected to remain a key focus in global asset allocation strategies throughout 2025.
