Gold’s Bull Run Gains Momentum as Major Bank Raises Forecast

Gold XC0009655157

The price of gold continues to shatter records, prompting a significant upward revision from Goldman Sachs. The influential US investment bank now projects substantially higher prices by the end of 2026, citing a fundamental shift in demand drivers. This rally is increasingly fueled not by transient crisis sentiment alone, but by sustained purchasing from long-term holders including central banks and private investors.

In a notable update, analysts at Goldman Sachs, including Daan Struyven and Lina Thomas, have lifted their year-end 2026 target for gold to $5,400 per troy ounce from $4,900. This represents an increase of over 10% from their prior estimate. They identify several structural forces at play:

• Robust Private Demand: Significant capital continues to flow into physical bullion and gold-backed exchange-traded funds (ETFs).
• Persistent Central Bank Buying: Institutions, particularly from emerging markets, are expected to continue expanding their reserves.
• Anticipated Rate Cuts: The analysts project the US Federal Reserve will cut interest rates by a further 50 basis points in 2026, enhancing the appeal of non-yielding assets like gold.

This confluence of factors means gold is benefiting simultaneously from tactical risk aversion and a strategic desire among investors to diversify portfolios permanently.

Currently trading around $4,862, the precious metal is at a 52-week high. It has gained approximately 5% over the past seven days and nearly 12% since the start of the year. The current price stands more than 10% above its 50-day moving average, highlighting the strength of the recent upward move.

From Geopolitical Spike to Calmer Consolidation

Market dynamics this week illustrated gold's dual nature. On Wednesday, the price surged roughly $130 within an eight-hour window—a parabolic move triggered by political tensions. Threats from former US President Donald Trump regarding new tariffs against European NATO allies and an escalation in the so-called "Greenland conflict" sparked a flight to perceived safe-haven assets.

By Thursday, conditions had settled somewhat. Following reports that Trump was stepping back from military options and partially retracting tariff threats, a mild consolidation took hold. From a technical chart perspective, however, the overarching bullish trend remains intact, especially as the recent pullback has been modest compared to the preceding sharp advance.

A Dual Pillar of Support: Institutional and Investment Demand

A cornerstone of the current bullish narrative is the unwavering physical demand from official institutions. Poland, for instance, plans to purchase an additional 150 tonnes of gold in 2026. Goldman Sachs forecasts average net monthly purchases of about 60 tonnes by central banks worldwide.

This trend is rooted in growing unease regarding US-denominated assets. Soaring US national debt and an unpredictable trade policy landscape are driving many nations to seek reduced dependence on the US dollar. In parallel, investment channels are also directing substantial capital toward the metal: Western gold ETFs have recorded inflows of approximately 500 tonnes since the beginning of 2025.

This combination of persistent official sector buying and strong ETF demand is tightening the available physical supply, providing a foundational price floor that exists independently of short-term news flow.

Analyst Forecasts Reveal a Wide but Bullish Range

While Goldman Sachs's $5,400 target places it among the more optimistic forecasters, some institutions envision even greater upside. A recent survey of bank analysts by the London Bullion Market Association (LBMA) reveals an unusually broad spectrum of price expectations.

• ICBC Standard Bank sees a potential peak as high as $7,150 per troy ounce.
• The LBMA consensus for the average 2026 price sits about 38% above the prior year's level.
• Even more cautious firms like UBS cite target ranges between $4,500 and $4,900—near current record territory.

The clear takeaway is that a majority of analysts surveyed do not anticipate a swift end to the rally, but rather a continuation at elevated levels, albeit with the likelihood of increased volatility.

Conclusion: A Multi-Driver Rally with Staying Power

Gold is currently experiencing the rare alignment of several powerful tailwinds: geopolitical friction, anticipated monetary easing, and structural portfolio reallocations by both central banks and private investors. Following an impressive gain of roughly 65% in 2025, the metal has already posted double-digit growth this year and breached the psychologically significant $4,800 barrier.

Short-term corrections remain a possibility, especially given the price's extended position above its 50-day average and elevated annualized 30-day volatility of over 21%. However, as long as central banks continue their steady accumulation and US monetary policy maintains its dovish trajectory, the $5,000 region is more likely to be a milestone than a final destination for this bull market.