Goldman Sachs(US:GS) Hua Er Jie Jian Wen·2025-04-13 03:21Core Viewpoint - Goldman Sachs has significantly raised its gold price forecast for the end of 2025 from $3,300 to $3,700 per ounce, reflecting increased central bank demand and rising recession risks [1][6]. Group 1: Central Bank Demand - Central bank gold purchases have exceeded expectations, with Goldman Sachs adjusting its monthly purchase forecast from 70 tons to 80 tons, still below the average of 86 tons per month since 2022 but significantly higher than the pre-2022 baseline of 17 tons [7]. - The strong recovery in central bank demand is a key factor behind the upward revision of the gold price forecast [6][7]. Group 2: Economic Uncertainty and ETF Inflows - Increased recession fears have led to a rise in ETF holdings, further boosting gold prices, with current spot gold reaching $3,237 per ounce [3][6]. - Historical trends indicate that during periods of recession concerns, ETF inflows often exceed levels implied by Federal Reserve interest rates, suggesting a potential acceleration in gold demand [8]. Group 3: Extreme Scenarios - In extreme scenarios, if central bank purchases rise to 110 tons per month and ETF holdings rebound to pandemic levels, gold prices could potentially reach $4,500 per ounce by the end of 2025, although this is considered a low-probability event [2][8]. - Goldman Sachs has factored in a 45% probability of a U.S. recession within the next 12 months, which could further drive ETF inflows and push gold prices to $3,880 per ounce [8]. Group 4: Investment Strategy - Goldman Sachs reaffirms its bullish stance on gold, emphasizing its unique position as a hedge against recession risks amid recent pressures in the U.S. bond market [9].