Core Viewpoint - Goldman Sachs has raised its gold price target for December 2026 to $5,400 per ounce from a previous forecast of $4,900, driven by strong central bank demand, favorable conditions for ETFs due to potential Fed rate cuts, and increased safe-haven demand amid geopolitical and policy uncertainties [1][2][4]. Group 1: Demand Drivers - The report identifies a shift from central bank-driven demand to a combination of central bank and private sector demand for gold, with private sector hedging becoming more pronounced and sticky [1][4]. - The forecast for gold price increases is divided into two phases: 2023-2024 driven by central bank purchases, and a significant acceleration in 2025 due to competition for limited bullion between central banks and private investors [2][6]. - Central banks are expected to purchase approximately 60 tons of gold monthly in 2026, contributing about 14 percentage points to the price increase, with a long-term trend of emerging market central banks diversifying their reserves [7]. Group 2: Private Sector Influence - The private sector's role is highlighted as crucial, with high-net-worth families increasing their physical gold purchases and investors using options as hedging tools, which are harder to quantify [2][4]. - The report emphasizes that the "sticky hedges" from private sector demand will likely remain in place through 2026, supporting a higher baseline for gold prices rather than a temporary spike [9][10]. Group 3: Price Dynamics and Risks - The report outlines that 17% of the expected price increase is attributed to central bank and ETF demand, while the sticky hedges from the private sector help maintain a higher price level [7][9]. - Key signals to monitor for potential price peaks include the sustainability of central bank gold purchases, the Fed's monetary policy direction, and the resolution of macroeconomic uncertainties [11][12][13].