Gold prices have been on a tear, and leading financial institution Goldman Sachs is predicting further gains, having recently revised its end-2026 gold price forecast upwards to $5,400 per ounce from a previous estimate of $4,900. This adjustment reflects the increasing trend of diversification into gold by both private-sector investors and emerging market central banks.
Spot gold climbed to a peak of $4,887.82 per ounce on Wednesday, January 21st, demonstrating the metal's strong performance. The safe-haven asset has already climbed more than 11% in 2026, continuing a rally that saw it jump 64% last year. On January 22, 2026, gold rose to $4,836.65 USD/t.oz, a 0.13% increase from the previous day.
Goldman Sachs believes that private sector investors are increasingly viewing gold as a strategic portfolio holding, using it to hedge against global policy risks. The firm assumes these investors will maintain their gold holdings through 2026, effectively raising the baseline for their price forecast. They also anticipate that emerging market central banks will continue to diversify their reserves into gold, with central bank buying averaging 60 tonnes in 2026. This diversification is seen as a structural shift, reflecting a desire to reduce reliance on traditional reserve currencies.
Besides Goldman Sachs, J.P. Morgan Global Research is forecasting gold prices to average $5,055/oz by the final quarter of 2026, and rising towards $5,400/oz by the end of 2027. J.P. Morgan also suggests that if diversification of just 0.5% of foreign U.S. asset holdings moved into gold, it would be enough new demand to drive prices to $6,000/oz. Commerzbank also raised its gold price forecast to $4,900 by the end of the year, citing increased safe-haven demand.
Other factors could also influence gold prices. Goldman Sachs anticipates that Western ETF holdings will increase as the U.S. Federal Reserve is likely to cut the funds rate by 50 basis points in 2026. A weaker dollar, lower interest rates, and heightened risk aversion could create a supportive environment for gold. The World Gold Council suggests that if economic growth slows and interest rates fall further, gold could see moderate gains in 2026. In such an environment, gold could rise 5%-15% in 2026 from current levels. Furthermore, declining long-term yields, geopolitical stress and a flight-to-safety could create exceptionally strong tailwinds for gold, potentially leading to a surge of 15%-30% from current levels.
Conversely, a sharp reduction in perceived risks surrounding global monetary policy could lead to liquidation of macro policy hedges, posing a downside risk to gold prices.
Despite some fluctuations, market analysts remain generally bullish on gold. Ewa Manthey, commodities strategist at ING Group, noted that expectations of interest rate cuts, ongoing geopolitical instability, and robust central-bank purchases all contribute to a firm upside risk for the commodity.
