Goldman Sachs raises gold price forecast by 10%

Goldman Sachs expects gold to reach $5,400 per ounce by year-end

Goldman Sachs raised its forecast for gold prices by about 10% by the end of this year, supported by central bank purchases and a broader expansion of investment diversification in the precious metal from the official sector to the private sector.

The US bank now expects gold to reach $5,400 per ounce by year-end, up from its previous estimate of $4,900, assuming private-sector investors buying gold as a hedge against macroeconomic policy risks maintain their positions through the end of the year.

Goldman Sachs also expects average central bank gold purchases to reach 60 tons this year, with emerging-market central banks likely to continue diversifying their reserves to include the yellow metal.

Last week, Commerzbank raised its year-end gold price forecast to $4,900 per ounce, citing rising demand for gold as a safe-haven asset.

The upward revision comes after gold prices logged a series of fresh record highs, climbing above $4,800 per ounce, near Goldman’s previous target, during a strong rally in the early weeks of the year, driven by heightened geopolitical and trade tensions and concerns over US President Donald Trump’s threats to Federal Reserve independence.