This new estimate is $150, or 3.1 per cent, lower than the bank’s previous forecast. However, Goldman Sachs still expects prices to rise: according to analysts’ estimates, by December 2027, gold could be around 16 per cent higher than current spot prices.
The main factor putting pressure on the market will be the Fed’s tightening of monetary policy, notes Investing. Goldman Sachs economists now expect the US regulator to raise rates by a further 0.25 percentage points in March 2027. This will be the third rate hike. According to the bank’s forecast, the previous two are expected in December 2026 and March 2027, with the first of these already factored into the previous baseline scenario.
Higher interest rates make gold less attractive to retail investors, as the metal does not generate interest income. Goldman Sachs believes this will dampen investment demand at least until early 2027, despite ongoing gold purchases by central banks.
At the same time, the bank maintains a positive long-term outlook. Gold purchases by central banks, including the People’s Bank of China, remain one of the main factors supporting the market.
Goldman Sachs anticipates a recovery in private investment demand once the Fed begins to cut interest rates. The bank’s economists expect a shift towards monetary easing in December 2027. This should ease pressure on the market and restore investor interest in gold.
Consequently, the combination of renewed private investment demand and further purchases by central banks will allow gold to surge to $4,650 per ounce by the end of 2027.
Follow our updates
Have information for the newsroom? Share it with Logos-Press
Comments
0No comments yet. You can start the conversation.
Comments are open to readers with a Logos Press account.
Sign in to comment