Goldman Sachs Maintains Bullish Outlook on Gold Despite Recent Sell-Off

Goldman Sachs has maintained its optimistic stance on gold, predicting a resurgence in prices by the end of 2026, according to Jin10. Analysts Lina Thomas and Daan Struyven highlighted that the medium-term outlook for gold remains robust. They attribute this to continued gold purchases by central banks and the expectation of two more interest rate cuts in the U.S. this year, which could push gold prices to $5,400 per ounce. However, the analysts warned of short-term 'tactical downside risks' for gold prices, particularly if energy supply shocks worsen, potentially driving prices down to $3,800 per ounce. Despite these risks, they noted that geopolitical tensions, such as a potential war involving Iran, could lead countries to diversify away from 'traditional Western assets,' thereby increasing gold's upward potential. The report also addressed concerns about some central banks possibly selling gold to support their currencies, suggesting that such fears are unlikely to materialize. Instead, Gulf countries are more inclined to intervene by reducing their holdings of U.S. Treasury bonds. Assuming no additional private sector investment, the analysts expect medium-term price volatility to moderate, allowing the pace of official sector gold purchases to accelerate again, with an average monthly purchase of about 60 tons.