Gold often has its own reasons to rise or fall. Still, it’s not just mountain dwarves who want large stockpiles of gold for when times are tough. @JONOGG

Goldman Sachs has doubled-down for gold bugs. The price of gold has risen more than 40% dollar terms in 2025, and this will likely mark the third consecutive year of double-digits gains for the shiny yellow metal. Goldman Sachs Research issued a report this week calling for another 6% gain from now into the middle of 2026.

The new forecast is calling for gold to reach $4,000 per ounce! And while a longer-term forecast was not specified in the report, Goldman Sachs sees three more years of buying ahead and noted that the price risk is more likely to exceed its forecast rather than undershoot. 

While the Goldman Sachs Research was posted publicly on its Insights site, the reality is that Goldman Sachs caters (almost) exclusively to institutions and high net worth investors. Try calling them up and seeing if you can open an account for $10,000 to $25,000. It generally takes millions of dollars to get into an account there.

Analyst Lina Thomas sees the bull market in gold being driven by strong structural demand from central banks. The expected rate cut campaign by the U.S. Federal Reserve is another driving force for the call, noting that the cuts support demand for gold from exchange-traded funds (ETFs).

Goldman Sachs also sees “conviction buyers” buying gold consistently regardless of the price. Their view is based on the economy or to hedge risk. These conviction buyers include central banks, ETF buyers, and speculators. In the end, these thesis-driven flows set the price direction of gold — with every 100 tonnes of net purchases corresponding to a 1.7% rise in the price of gold.

Then there are opportunistic buyers of gold. These buyers are households in emerging markets that step in when they believe gold’s price is right. Goldman Sachs believes that these “dip-buyers” may help to put in support — floor under prices on the way down, but also as resistance as the price rises.

Central banks are shown to have purchased 64 tonnes on an average month n 2025.While this is a large figure, it has also been under the Goldman Sachs forecast of 80 tonnes per month. Goldman Sachs now believes that central banks will continue as net buyers of gold for another three years as a structural change after Russia’s foreign-currency reserves were frozen after its invasion of Ukraine. Lina Thomas’ report said:

“We view this as a structural shift in reserve management behavior, and we do not expect a near-term reversal. Our base case assumes that the current trend in official sector accumulation continues for another three years.”

Thomas also outlined how central banks of emerging market nations haven’t accumulated nearly enough gold despite their buying trends:

“Our rationale is that emerging market central banks remain significantly underweight gold compared to their developed market counterparts and are gradually increasing allocations as part of a broader diversification strategy.”

China has been a gold buyer, but it has paused around certain price points after a previous trend of buying every month. The official Goldman Sachs estimate is that China holds less than 10% of its reserves in gold — versus roughly 70% for the U.S. (and for Germany, France, and Italy).

Another figure that was used in the gold bull thesis came from the World Gold Council. Their central bank survey indicated that 95% of those central banks surveyed expect global gold holdings to increase over the coming year. The survey also noted that none (of the central banks) expect their gold holdings to decrease over the same forecast period.

There is a tactical call here as well, tied to hedge funds and institutions via speculative positioning in derivatives markets. The report does note that the increasing long positioning may raise the risk of a tactical pullback… Still, Goldman Sachs Research noted that it sees a greater risk that the gold price will exceed its forecast rather than undershoot.