Core Viewpoint - Goldman Sachs remains bullish on international spot gold prices, raising its forecast for gold prices at the end of 2026 from $4,900 to $5,400 per ounce, driven by increased demand from the private sector and central banks diversifying their reserves [1] Part 1: Evolution of Gold Demand - The current gold price upcycle began in February 2022, triggered by the freezing of Russian central bank reserves, leading to a reassessment of reserve asset neutrality and geopolitical security by global official sectors [2] - Central bank gold purchases are expected to be the main driver of gold price increases in 2023-2024, with annual price increases of 15% and 26% during this period [2] - In November 2025, global central bank gold purchases fell to 24 tons, but the rolling 12-month average remains at 60 tons per month, significantly higher than the historical norm of 17 tons per month before 2022 [2] - The year 2025 is seen as a turning point for the acceleration of the gold price upcycle, with private sector demand entering the market and creating dual pressure on limited gold supply [2] Part 2: Private Sector as Core Support for Price Increase - The core assumption for Goldman Sachs' price forecast is the "sticky nature" of private sector gold hedging positions, which are based on long-term macro risks and do not have short-term liquidation conditions [3] - From early 2025 to the report's release, Western gold ETF holdings increased by approximately 500 tons, indicating a recovery in institutional investor demand for gold [3] - Emerging hedging channels are creating incremental demand, with high-net-worth individuals increasing physical gold holdings and speculative funds expanding bullish options positions [3] Part 3: Breakdown of the $5,400 Target Price - The $5,400 target price represents a 17% increase from the average price of $4,600 per ounce in January 2026, supported by three main dimensions [6] - Central banks are expected to maintain an average monthly gold purchase of 60 tons in 2026, contributing 14 percentage points to the price increase [6] - The anticipated Federal Reserve interest rate cuts are expected to further increase Western ETF holdings, contributing an additional 3 percentage points to the price increase [6] - The Delta hedging effect from expanding bullish options positions will create mechanical buying pressure, increasing the price elasticity of gold [6] Part 4: Signals for Gold Price Peaks - Three core signals indicate when gold prices may peak: 1. Central bank gold purchases fall below 17 tons per month, indicating a weakening of the long-term support logic for gold [8] 2. A reversal in the Federal Reserve's policy from a rate-cutting cycle to a rate-hiking cycle, which would suppress gold demand [8] 3. Resolution or alleviation of core macro risks, leading to a potential liquidation of private sector gold holdings [8]