Goldman Delays Gold Forecast to 2026

Goldman Sachs Group Inc (GS) has withdrawn its price target of $3,000 for gold by the end of 2023, anticipating that the Federal Reserve will implement less than expected interest rate cuts. The bank has revised its forecast to mid-2026. Goldman analysts Lina Thomas and Daan Struyven stated that the slowdown in monetary expansion in 2025 would reduce demand for gold-backed exchange-traded funds (ETFs), which could result in prices reaching $2,910 per ounce by the end of the year.

The analysts noted that the unexpectedly low ETF flows in December had created a lower starting point for gold pricing in the new year, attributed to a reduction in uncertainty following the U.S. elections. This situation is seen as one of the barriers to upward movement in the gold market.

Continuing easing policies from the People's Bank of China Goldman Sachs analysts have indicated that the People's Bank of China (PBOC) is expected to continue easing its monetary policy in 2025. Referring to the fourth-quarter meeting announcement published on Friday, the analysts highlighted that the PBOC has committed to implementing a more proactive easing strategy by lowering reserve requirements and policy interest rates when necessary.

Goldman Sachs anticipates 20 basis point interest rate cuts in both the second and fourth quarters of 2025. Additionally, a total reduction of 50 basis points in reserve requirements is expected in the first and third quarters. These actions by the PBOC are said to be aimed at controlling the devaluation of the yuan and avoiding sudden losses in value ahead of potential U.S. tariffs. These policies are regarded as part of China's effort to maintain economic stability.