Goldman Sachs revamps gold price target for the rest of 2026

Core Viewpoint - Gold has experienced a significant price surge, reaching an all-time high of nearly $5,589 in January 2026, and stabilizing above $5,000, with current trading around $5,187 per ounce, indicating a strong upward trend [1] Group 1: Goldman Sachs' Price Target - Goldman Sachs raised its year-end 2026 gold price target to $5,400 per ounce from a previous forecast of $4,900, reflecting a shift in the demographics and motivations of gold buyers [2][3] - The bank emphasizes that the current demand for gold is driven by structural macro risks rather than short-term events, with central banks playing a crucial role in this demand [4] Group 2: Central Bank Purchases - Goldman forecasts that central banks will purchase an average of 60 tonnes of gold per month in 2026, driven by emerging market reserve managers diversifying their holdings away from dollar-centric assets [4][8] - China's central bank has extended its gold purchases for 15 consecutive months as of January 2026, highlighting the sustained demand from central banks [5][8] Group 3: Private Investor Behavior - Western exchange-traded funds (ETFs) have added approximately 500 tonnes of gold since the beginning of 2025, indicating a structural reallocation of assets rather than a tactical response to interest rate cuts [7][8] - High-net-worth individuals and family offices are increasingly purchasing physical gold bars, while institutions are buying call options on gold ETFs as a hedge against concerns over fiscal sustainability and central bank independence [7][8] Group 4: New Demand Drivers - The growing concern over government debt levels and long-term monetary stability has introduced a new category of demand for gold, referred to as the "debasement trade," which was not as prominent in previous gold cycles [8]