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Goldman Sachs Group Inc. said it no longer sees gold reaching $3,000 an ounce by the end of the year, pushing the forecast to mid-2026 on expectations the Federal Reserve will make fewer rate cuts.

Slower monetary easing in 2025 is set to crimp demand for bullion-backed exchange-traded funds, causing analysts including Lina Thomas and Daan Struyven to project prices will hit $2,910 an ounce by year-end. Weaker-than-expected ETF flows in December — driven by easing uncertainty after the US election — also contributed to a lower starting point for pricing into the new year, they wrote in a note.

“Opposing forces — lower speculative demand and structurally higher central bank buying — have effectively offset each other, keeping gold prices range-bound over the past few months,” the analysts said, adding that central banks’ appetite will remain a key driver for prices in the longer-term. “Looking ahead, we forecast monthly purchases to average 38 tons through mid-2026.”

The precious metal surged 27% last year in a record-breaking run that was supported by monetary easing in the US, safe-haven demand, and sustained buying by the world’s central banks. The rally stalled in early November, however, as Donald Trump’s US election victory buoyed the dollar. More recently, gold has been under pressure as Fed officials have emphasized the need to take a more cautious approach to reducing borrowing costs this year amid renewed concerns about inflation.

Goldman’s economists now expect 75 basis points of interest rate cuts this year, down from a previous outlook of 100 basis points. The forecast is more dovish than current market pricing, as the bank sees underlying inflation trending lower. The economists also expressed skepticism that likely policy changes under the second Trump administration will lead to higher interest rates.

(By Sybilla Gross)

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