Gold near $4,000… Goldman Sachs "expects $4,900 by end of next year"

Dollar weakness and persistent geopolitical tensions

Continued inflows into gold ETFs and central bank purchases

There is a forecast that gold, which has been hitting record highs day after day, will rise to $4,900 per ounce by the end of next year.

Goldman Sachs raised its forecast, saying gold will reach $4,900 per ounce by the end of next year. On that day, as of 1:30 a.m. GMT, spot gold was trading around $3,960 per ounce. This amount is close to the record high of $3,977.19.

According to Reuters on the 7th (local time), Goldman Sachs raised its year-end gold price forecast from $4,300 per ounce to $4,900 per ounce, citing inflows into gold-based exchange-traded funds (ETFs) and the possibility of central bank purchases.

Goldman Sachs said, "As ETF holdings increase, there is a possibility of exceeding the estimated price that can be inferred in relation to interest rates," and raised its gold price forecast.

Gold has attracted attention as a hedge against risks such as a weak dollar and increased trade and geopolitical tensions, amid purchases by central banks and rising demand for gold-backed ETFs. It has risen 51% so far this year.

Goldman Sachs expects central bank gold purchases to average 80 tons in 2025 and 70 tons in 2026. It said emerging market central banks are likely to continue a strategy of structurally diversifying their gold holdings.

Also, demand for gold ETFs in the West is expected to increase due to the possibility of interest rate cuts by the U.S. Federal Reserve. The Fed is widely expected to cut the policy rate by 100 basis points (1bp=0.01%) by mid-2026.

Goldman Sachs said that after the sharp rise in gold prices in September, Western ETF holdings have caught up with estimates reflecting U.S. interest rates. It added that speculative positions have generally stabilized and that the recent strength in gold ETFs is not excessive.

Jeong-a Kim, contributing reporter kja@hankyung.com