Key Takeaways
Gold held near $4,720 per ounce after a Goldman Sachs report maintained its year-end price forecast at $5,400 an ounce but warned of significant short-term liquidation risks.
"Should the geopolitical disturbances in the Strait of Hormuz persist, or if there are further adjustments in bond or equity markets, gold remains at risk of further liquidations," analysts Lina Thomas and Daan Struyven said in the April 28 report.
The forecast comes as gold trades roughly 19 percent below its January 2026 peak of nearly $5,600 an ounce. The metal has been pressured by a firming U.S. Dollar Index, trading near 98.65, and a 10-year Treasury yield holding above 4.3 percent as the Federal Reserve is widely expected to keep interest rates unchanged at its upcoming meeting.
Goldman's tactical caution contrasts with its structural bullishness, which is anchored by an assumption of 60 tonnes in monthly central bank buying and 50 basis points in Fed rate cuts later in the year. The divergence highlights a key debate on Wall Street, with Morgan Stanley recently cutting its forecast to $5,200 while JPMorgan remains more bullish with a $6,300 target.
The core of Goldman's bullish long-term thesis rests on continued diversification into gold by global central banks. The bank's baseline assumption is for 60 tonnes of monthly net purchases throughout 2026. A recent Goldman survey of 29 central banks supports this view, finding that approximately 70 percent of respondents expect global gold reserves to increase over the next 12 months. The same survey showed a majority of central banks expect the gold price to hold above $5,000 an ounce a year from now. This persistent sovereign demand acts as a structural floor, absorbing supply and providing a buffer against speculative selling.
The primary near-term risk stems from the potential for a stronger dollar and higher bond yields if tensions in the Middle East escalate further. President Donald Trump's recent cancellation of a diplomatic trip to Pakistan to negotiate with Iran has kept geopolitical risks elevated, supporting oil prices above $100 a barrel. This feeds into inflation concerns, reducing the Federal Reserve's flexibility to cut rates and thereby increasing the opportunity cost of holding non-yielding gold. The dynamic has weighed on gold-mining equities, with the world's largest producer, Newmont Corporation, recently lowering its 2026 production guidance by 10 percent to 5.3 million ounces, designating it a "trough year."
This article is for informational purposes only and does not constitute investment advice.
