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 is reaffirming its bullish stance on gold, advising investors to “go long” on its favored commodity. The yellow metal popped to all-time highs in January, capitalizing on 2024’s record-breaking rally. The global investment bank’s positive outlook is informed by structural shifts in global markets and immediate turmoil induced by tariff threats.
Gold Gains Out of the Gate
Gold prices wasted no time building on last year’s remarkable gains, rising more than 6% in January before hitting a record-high over $2,900 in February. Despite closing out 2024 with a 27% return (during which it outpaced the S&P 500), the yellow metal is accelerating its upward momentum. While broad macroeconomic challenges have lifted all commodities, gold stands out as the clear winner, reflecting strong investor preference.
As economic and geopolitical instability intensifies, analysts see a favorable macroeconomic landscape for gold to thrive. The threat of rising inflation, escalating geopolitical tensions, and broader market volatility continue to fuel investor demand for safe-haven assets. In a sea of high-performing commodities, Goldman Sachs keeps gold as its top choice.
Tariff Shocks Boost Demand
President Trump’s fast-paced and unpredictable tariff threats supported gold’s early 2025 jump. As the world braces for more friction in international trade, the metal has surged for two main reasons:
Central Banks Reinforcing Gold Reserves – Over the past few years, central bank gold demand has remained elevated as countries seek to diversify their holdings through concerted de-dollarization efforts. Trump’s protectionist economic policies have only accelerated this shift as nations prepare for a more polarized, isolationist global economy. UBS has already projected national-level gold demand to hit 900 tons in 2025.
Institutional Investors Onshoring Physical Gold – The fear of possible tariffs on precious metals imports has fueled a rapid influx of physical bullion from abroad. Domestic investors are drying up foreign bullion banks leading to severe shortages. The resulting boost in domestic physical gold has created a price difference between New York and London, leading to more purchases from abroad as investors take advantage of the discrepancy. Both moves have spiked gold prices.
Structural Shifts Underpin Gold’s Momentum
Beyond tariff shocks, Goldman Sachs points to structural shifts in the global economic landscape as catalysts for gold’s momentum. For the past few years, countries have been reducing their dependence on the dollar by replacing it with gold. The yellow metal is the favored replacement for the world reserve currency to back international trade and shore up local economies. The rise of economic isolationism and protectionism has sped up this movement.
What “Go Long” Means for Investors
Goldman Sachs has already voiced its optimistic outlook for gold. This reiteration to “go long” indicates the investment bank expects the yellow metal to steadily increase far down the road. Analysts have set a price target of $2,910 by the end of 2025 and $3,000 in mid-2026. Despite sitting near record highs, Goldman Sachs is recommending a long-term position.
These projections align with marketwide gold price forecasts as Wall Street and Main Street make the case for a prolonged gold rally.
Big banks are all seeing the price of gold going much, much higher. Gold has a tremendous amount of upward potential and huge fundamentals behind it.– Steve Rand, Sr. Precious Metals Advisor at Scottsdale Bullion & Coin