Goldman Sachs raises 2025 gold price forecast amid strong central bank demand

Goldman Sachs has raised its year-end 2025 gold price forecast to $3,700 per ounce from $3,300, citing stronger-than-expected central bank demand and increased exchange-traded fund (ETF) inflows driven by recession concerns.

Price is expected to reach $4,000 by mid-2026. The forecast now anticipates central banks purchasing 80 tons of gold monthly, up from the previous estimate of 70 tons.

"If a recession occurs, ETF inflows could accelerate further and lift gold prices to $3,880 per troy ounce by year-end," Goldman Sachs stated in a research note dated Friday.

However, if economic growth surprises on the upside due to reduced policy uncertainty, ETF flows could return to rates-based predictions, keeping gold prices closer to $3,550 per troy ounce.

Meanwhile, spot gold surged to another record high of $3,245.42 per ounce on Monday but lacked clear direction as markets digested ongoing tariff developments.

President Donald Trump said that while smartphones and computers would be exempt from the latest round of reciprocal U.S. tariffs, levies on other tech imports, including semiconductors, remained likely.

Gold’s rally has been driven by factors including geopolitical uncertainties, central bank buying, and strong ETF inflows. Prices have climbed more than 23% this year, breaching the $3,200 threshold for the first time on Friday. Goldman Sachs also revised its central bank demand estimate upward to 80 metric tons per month, from 70 tons previously.

Despite hitting record highs, gold prices retreated slightly following Trump’s tariff exemptions. According to Reuters, spot gold slipped 0.4% to $3,222.49 per ounce as of 08:52 GMT, easing from the all-time high reached earlier in the day. Analysts suggest any decline will likely be temporary, with bullion continuing to serve as a hedge against economic and geopolitical uncertainties.