Goldman Sachs(US:GS) Hua Er Jie Jian Wen·2025-12-19 04:49Core Viewpoint - Goldman Sachs reiterates a bullish outlook for gold prices, projecting them to reach $4,900 per ounce by 2026, driven by central bank demand and interest rate cuts [1][2]. Group 1: Price Forecast and Drivers - Goldman Sachs maintains its base case forecast of gold prices climbing to $4,900 per ounce by December 2026, representing approximately a 14% increase from current levels [2]. - The price increase is attributed to two main factors: structural demand from global central banks and cyclical support from the Federal Reserve's interest rate cuts [3]. Group 2: Central Bank Demand - The report highlights a structural change in central bank gold purchasing behavior, particularly following the freezing of Russian foreign exchange reserves in 2022, which has led emerging market central banks to diversify their reserves away from USD assets towards gold [4]. - Goldman Sachs expects global central bank gold purchases to remain strong, averaging about 70 tons per month in 2026, which is four times the average monthly purchases of 17 tons prior to 2022 [4]. Group 3: Private Investor Potential - In addition to central bank demand, there is significant potential from private investors, with current gold ETF allocations in U.S. private financial portfolios at only 0.17%, down 6 basis points from the peak in 2012 [5]. - If the allocation of gold in U.S. financial portfolios increases by just 1 basis point, it could lead to a 1.4% increase in gold prices, indicating that private capital could significantly boost gold prices beyond current expectations [5]. Group 4: Investment Value - Goldman Sachs emphasizes that in the current macroeconomic environment, gold and commodities provide substantial insurance value in investment portfolios, especially when stock and bond markets fail to effectively hedge against inflation and growth risks [6].