Goldman Sachs(US:GS) Feng Huang Wang·2026-01-22 10:48Core Viewpoint - The price of gold is expected to rise significantly, with Goldman Sachs raising its year-end forecast to $5,400 per ounce, reflecting strong demand from private investors and central banks [2][6]. Group 1: Price Trends - Gold prices have surged over 60% since 2025, marking the largest increase since 1979, despite some fluctuations this year [1]. - As of the latest report, gold prices are hovering around $4,830 per ounce, having increased approximately 11% this year and more than doubled since early 2023 when prices were around $1,865 per ounce [2][6]. - Analysts predict that gold prices will break the $5,000 mark this year due to declining real interest rates and ongoing diversification efforts away from the dollar [8][9]. Group 2: Demand Drivers - The demand for gold is being driven by private sector investments, with high-net-worth families purchasing physical gold and investors buying call options [6]. - Central banks are expected to average monthly gold purchases of 60 tons, as they diversify their assets and compete with private investors for limited gold supplies [6]. - The demand for gold as a hedge against global macroeconomic risks is anticipated to remain stable, with private investors showing increased "stickiness" in their positions [6]. Group 3: Supply Dynamics - The supply of gold remains stable, as the majority of gold already exists and new production accounts for only about 1% of the total global supply [7]. - Gold prices typically only stop rising when demand weakens, such as during geopolitical easing or when central banks feel less need to diversify [7]. Group 4: Market Sentiment - There is a growing optimism on Wall Street regarding gold prices, with analysts expecting a continued upward trend due to geopolitical tensions and the search for safe-haven assets [8][9]. - The London Bullion Market Association's survey indicates that analysts expect gold prices to reach $5,400 per ounce this year, reflecting a robust long-term trend rather than speculative peaks [9].