Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
Goldman Sachs joins a growing collection of major banks raising their 2025 gold price predictions following an early rally. Now, the world’s second-largest investment bank expects the yellow metal to reach $3,100, up from their previous $2,910 target. This positive outlook stems from relentless central bank consumption as governments actively diversify their reserves and shift away from dollar dependence. If policy instability prolongs economic uncertainty, analysts suggest the yellow metal could climb even higher to a record-shattering $3,300.
Central Banks to Boost Prices by 9%
As the world’s largest investors, governments play a decisive role in the gold market, significantly boosting prices over the past few years through robust demand. In 2024, central banks accumulated 1,045 tons marking the third year in a row that total demand reached over 1,000. Goldman Sachs anticipates national-level buying to “add 9% to the gold price by year-end.”
The bank upped its prior projection for central band demand from 41 tons to 50 tons per month, describing the change as “structurally higher.” Goldman Sachs analysts point out that gold could stretch to $3,200 by EOY 2025 if monthly purchases reach 70 tons. UBS also indicates continued growth in national consumption, projecting gold buying to reach 900 tons in 2025. The World Gold Council (WGC), a leading authority in the industry, sees central banks preferring gold over the US dollar throughout the year.
What’s driving central bank demand?
The surging national debt could encourage more central bank buying as countries, especially those with sizable US Treasury holdings, grow skeptical about America’s fiscal sustainability. Goldman Sachs highlights this development within the broader de-dollarization movement as nations en masse shift from reliance on USD to independence through gold. A combination of fiscal mismanagement and dollar weaponization has turned the dollar into a risk rather than an asset in the eyes of many foreign investors.
Structurally higher central bank demand will add 9% to the gold price by year-end, which combined with a gradual boost to ETF holdings as the funds rate declines.– According to Goldman Sachs Analysts
Retail Demand & Economic Uncertainty
Goldman Sachs also highlights “a gradual boost” from gold ETFs as retail investors diversify. Thus far, central banks have made up the lion’s share of gold demand, although renewed interest in the retail space could help elevate gold prices. Analysts project safe-haven demand to increase as inflation and recession fears grow from the Trump administration’s bold economic agenda. According to the bank, gold could extend to $3,300 if policy confusion and disruption, mostly born of tariff threats, remains elevated.
Federal Reserve Headwinds
While gold’s outlook is positive, the yellow metal could face some resistance. Goldman Sachs’ forecast settles to $3,060 in the event of steady interest rates. Yet, investors are already factoring in one rate cut in 2025, suggesting interest rates are likely to drop. Furthermore, higher-than-anticipated jobless claims, which extended to the highest point in five months, could force the Fed to further slash interest rates to stimulate economic activity. Lower interest rates, in general, are bullish for gold prices as the opportunity cost of owning physical assets decreases.
In For the Long Haul
Earlier in the year, Goldman Sachs announced their positive outlook for gold by advising investors to “go long” on its favored commodity. The bank’s most recent target increase reinforces this sentiment. Analysts acknowledge some short-term obstacles to the rally but remain adamant about the yellow metal’s long-term growth potential. This sentiment aligns with marketwide gold price forecasts for 2025 as experts across the economic and financial markets call for higher gold.