Goldman Sachs Gold Q2 2026 Rising ETF Steady Central Bank Demand Signals Sustained Market Confidence

Goldman Sachs projects that gold will reach $4,900 per ounce by December 2026, an upward revision from its earlier forecast of $4,300. The firm attributes this change to increasing exchange-traded fund (ETF) inflows and continued central bank purchases, both of which are expected to provide structural support for the precious metal. Analysts suggest that lower interest rates and persistent diversification away from the U.S. dollar will further strengthen demand.

The investment bank expects that as the Federal Reserve reduces the policy rate by approximately 100 basis points by mid-2026, Western ETF holdings will expand. A lower rate environment typically reduces the opportunity cost of holding non-yielding assets like gold, encouraging investors to allocate more capital toward it. This shift is expected to align with ongoing institutional and sovereign strategies to hedge against inflation and policy uncertainty.

Central banks, particularly in emerging markets, remain a key source of demand. Goldman Sachs estimates that net official sector purchases will average 80 tonnes in 2025 and 70 tonnes in 2026. These acquisitions reflect efforts by monetary authorities to diversify reserves away from the dollar and to protect balance sheets from currency volatility. The pattern of buying often slows during midyear months and accelerates again in the final quarter, consistent with historical seasonal behavior.

The following table outlines Goldman Sachs’ updated projections and assumptions:

Gold’s performance in 2025 has already been robust, with the spot price rising more than 50% compared with the previous year. This increase has been supported by a weaker U.S. dollar, geopolitical uncertainty, and the perception of gold as a reliable hedge against both inflation and systemic risk. Despite these gains, speculative positioning has remained relatively steady, suggesting that the rally is being driven primarily by fundamental rather than short-term trading factors.

Goldman Sachs distinguishes between two main groups of gold buyers.

1. Conviction buyers include central banks, ETFs, and long-term investors who purchase gold based on macroeconomic or strategic considerations rather than short-term price movements.
2. Opportunistic buyers, such as households in emerging markets, tend to enter the market when prices appear favorable.

The firm’s analysis indicates that every 100 tonnes of net buying by conviction investors corresponds to roughly a 1.7% increase in the gold price. This relationship underscores the influence of structural demand compared with speculative flows. Opportunistic buyers, by contrast, often act as a stabilizing force, cushioning declines and moderating sharp rallies.

Speculative sentiment in the futures and options markets has also turned positive. The net long positions in gold on COMEX are in the upper range of historical levels since 2014, implying that hedge funds and other large investors expect prices to rise further. However, Goldman Sachs cautions that such positioning can lead to temporary corrections when traders rebalance portfolios.

The bank’s analysts consider the risks to the forecast to be tilted toward higher prices. They note that private-sector diversification into gold could exceed current assumptions, particularly if financial market volatility or inflation expectations rise faster than anticipated. In this scenario, ETF inflows could surpass the baseline outlook, pushing prices above the $4,900 target.

Gold’s role as a portfolio diversifier remains central to Goldman Sachs’ argument. The firm emphasizes that traditional equity-bond portfolios can struggle during periods of stagnant growth and persistent inflation, when both asset classes deliver weak real returns. In such environments, commodities—and especially gold—have historically provided positive performance. Past examples include the 1970s inflation era and the 2022 energy supply disruptions, when gold and commodity prices rose as investors sought tangible assets.

The research team highlights that commodities often perform well during periods when monetary policy credibility is questioned or when geopolitical events disrupt trade flows. Supply concentration in certain commodities has increased, giving producing nations greater influence over global prices. This dynamic enhances the strategic case for holding gold and other commodities as part of a diversified investment strategy.

Goldman Sachs’ analysis of ETF activity shows a strong recovery in holdings since late summer. Western ETFs, which had lagged earlier in the year, have now caught up with the bank’s rate-based model of expected demand. Analysts interpret this as a sign of sustainable inflows rather than an overextension. The renewed interest reflects both institutional and retail investors seeking protection from currency depreciation and macroeconomic uncertainty.

To illustrate the interplay between different demand sources, the following list summarizes the main contributors to gold’s current momentum:

• Central Banks: Consistent accumulation led by emerging markets, motivated by reserve diversification.
• ETFs: Renewed inflows tied to lower interest rates and inflation concerns.
• Speculators: Net long positioning signaling optimism but subject to cyclical adjustments.
• Households: Opportunistic demand, especially in Asia, providing price stability.
• Institutional Investors: Increased allocation to gold as a hedge against equity and bond volatility.

Goldman Sachs analysts also note that speculative flows have contributed only modestly to the recent rally, accounting for a small fraction of the total price movement. This observation supports the view that the current uptrend is built on structural rather than transient factors. The firm expects that as central banks maintain steady purchases and ETFs attract new inflows, the price trajectory will remain upward through 2026.

The bank’s macroeconomic outlook assumes a gradual easing cycle by the Federal Reserve and a stable global growth environment. Under these conditions, real interest rates are expected to remain low, which historically correlates with stronger gold prices. If inflation expectations rise or major currencies weaken, the upside potential could expand further.

From a risk management perspective, Goldman Sachs continues to recommend diversification through commodities. The firm argues that gold’s performance during periods of negative real returns for both stocks and bonds makes it an effective hedge against systemic shocks. The historical pattern shows that when both equities and fixed income underperform, gold typically delivers positive inflation-adjusted returns.

The table below summarizes key relationships identified by Goldman Sachs Research:

Goldman Sachs’ current stance positions gold as a strategic asset in multi-asset portfolios. The firm views the metal not only as a hedge against inflation but also as protection against geopolitical and financial instability. Central bank accumulation, ETF inflows, and the evolving global monetary environment form the foundation of its bullish outlook through 2026.

While short-term corrections may occur due to profit-taking or speculative rebalancing, the underlying fundamentals—especially official sector demand and easing monetary policy—continue to support higher valuations. The combination of institutional conviction, emerging market participation, and monetary diversification provides the structural base for sustained strength in the precious metal over the next two years.