Goldman Sachs (GS) has raised its price forecast for gold closer to the groundbreaking mark of $4,000, citing recession fears and strong central bank demand for the metal.
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Central Bank Demand
The Wall Street Bank lifted its end of 2025 gold price forecast to $3,700 per ounce from $3,300, with a projected range of between $3,650 to $3,950. This was off the back, it said, of stronger-than-expected demand from central banks and higher exchange traded fund inflows due to recession risks.
“If a recession occurs, ETF inflows could accelerate further and lift gold prices to $3,880 per troy ounce (toz) by year-end,” the bank said in a note. “That said, if growth surprised to the upside on reduced policy uncertainty, ETF flows would likely revert to our rates-based predictions, with year-end prices closer to $3,550/toz.”
Gold-linked ETFs have had a stellar 2025 to date. The VanEck GoldMiners ETF (GDX), which invests in gold and silver miners’ stocks, has been one of the beneficiaries helping its share price soar by over 46% in the year to date. The SPDR Gold Shares ETF (GLD) which is exposed to the physical holding of gold bullion, has also flourished up 23% since the turn of the year.
The bank also nudged up its central bank demand assumption to 80 metric tons per month, from 70 tons earlier.
Economic Downturn
The spot gold price today was sitting at $3,224 showing few signs that demand has been affected by what is being perceived as a slight softening in President Trump’s tariffs stance. His pause in most of the huge hikes in reciprocal tariffs, with the exception of China, and an exemption for electronics has raised some hopes that a global economic downturn could be averted.
However, it seems that Goldman Sachs is not popping any champagne corks quite yet meaning gold will retain its safe haven allure as the seasons pass this year.
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