Goldman Sachs has updated its forecast for gold prices, pushing the timeline for gold to hit $3,000 per ounce from December 2025 to mid-2026. This adjustment stems from a revised outlook on Federal Reserve rate cuts and other market dynamics.

Key Factors Behind the Revision

1. Fed Rate Cuts

   • Goldman now anticipates a 75-basis-point rate cut in 2025, lower than the 100-basis-point reduction initially expected.
   • Slower rate cuts impact gold demand, particularly from ETFs, delaying the upward momentum.

2. ETF Demand

   • A subdued pace of ETF inflows is expected, especially following the resolution of the U.S. elections.
   • Speculative demand, which had surged pre-election, has since moderated.

3. Central Bank Demand

   • Structural demand from central banks remains robust, particularly after geopolitical tensions like the freeze of Russian assets.
   • Monthly central bank purchases are projected to average 38 tonnes through mid-2026, significantly higher than pre-freeze levels.

Gold Price Projections

• Mid-2026: Gold expected to reach $3,000 per ounce.
• End-2025: Forecast adjusted to $2,910 per ounce.

Despite the delay, Goldman Sachs maintains a bullish long-term outlook for gold, citing central bank purchases as a key driver.

Risks to the Forecast

1. Downside Risks

   • Prolonged high interest rates by the Federal Reserve could weigh on gold prices.

2. Upside Risks

   • A U.S. recession or "insurance cuts" by the Fed could accelerate gold's rise, potentially exceeding the $3,000 target earlier than expected.

Market Insights with FMP APIs

Investors can monitor gold market trends and price drivers using tools like:

• Commodities API: Real-time gold prices and other key commodity data.
• Economics Calendar API: Track Federal Reserve announcements and economic events impacting gold.

Conclusion

While structural factors like central bank demand support a bullish outlook for gold, macroeconomic uncertainties and ETF flows could influence short-term movements. With tools to track commodities and economic trends, investors can stay informed and make data-driven decisions in this evolving landscape.