Goldman’s Gold $4,500 Forecast ARE conservative

Over 70% of World is Dumping US Treasuries and Buying Gold. Get in Front of This Once in a LifeTime Stampede

Goldman Sachs has recently revised its gold price forecast for 2025, citing a range of structural and geopolitical factors driving demand. The investment bank raised its year-end target to $3,300 per ounce, with an upper boundary of $3,520 per ounce. Additionally, it introduced a tail-risk scenario that could see gold prices spike as high as $4,500 per ounce. This upward revision reflects a combination of factors including central bank purchases, speculative positioning, and emerging demand from China's insurance sector.

One key driver is the sustained buying by central banks, which Goldman identifies as a permanent shift in reserve management behavior following geopolitical tensions such as the freezing of Russian assets in 2022. Central banks in emerging markets, particularly China, are diversifying their reserves by increasing gold holdings. Goldman now estimates monthly central bank purchases to average 70 tonnes, up from its previous forecast of 50 tonnes. This trend underscores gold's appeal as a secure asset that cannot be frozen or confiscated when held domestically.

Another significant factor is China's recent policy allowing insurers to invest up to 1% of their assets under management in gold, potentially translating into demand for approximately 280 tonnes. While this demand has yet to materialize fully, Goldman expects it to emerge during price corrections, providing stability to the market. The structure of China's gold market—regulated by import quotas and influenced by local inventory levels—will determine how this demand plays out.

Goldman also highlights the impact of speculative positioning and ETF inflows on gold prices. The recent breakout above $3,000 per ounce was driven by a rebound in speculative positioning and increased interest from ETFs. These factors are expected to continue supporting prices alongside central bank purchases.

The tail-risk scenario of $4,500 per ounce assumes simultaneous spikes in central bank buying (to 110 tonnes per month), a return of ETF holdings to pandemic-era highs, and speculative positioning exceeding historical peaks. While this scenario is considered unlikely under normal conditions, it underscores the potential for extreme price movements if multiple bullish factors align.

Overall, Goldman's analysis points to a robust outlook for gold in 2025, supported by structural demand shifts and geopolitical hedging motives. The report emphasizes the importance of monitoring entry points and policy risks as investors navigate this evolving landscape