Goldman Sachs Adjusts 2025 Gold Price Forecast

Goldman Sachs has revised its 2025 gold price forecast, lowering its year-end target to $2,910 per ounce from the previously projected $3,000. This adjustment reflects a more tempered outlook on central bank monetary easing, reduced demand expectations for gold ETFs, and a softer starting point for prices entering the new year.

Key Factors Influencing the Forecast

Slower Monetary Easing: Goldman Sachs attributes the downward revision primarily to an anticipated slower pace of central bank monetary easing in 2025. With global central banks taking a more measured approach to rate cuts and liquidity injections, the demand for gold as a hedge against inflation and currency depreciation may not be as robust as initially projected.

Impact on ETF Demand: Reduced monetary easing is expected to dampen the appeal of gold ETFs, a critical driver of investment demand for the metal. While gold remains a popular choice for portfolio diversification, the absence of aggressive central bank support could limit inflows into these funds.

Lower Starting Prices: Goldman Sachs also notes that gold prices began the year at a relatively lower level than previously anticipated, influencing the revised year-end target. This weaker starting point creates a narrower path for substantial price gains throughout 2025.

Continued Support from Central Bank Buying

Despite these adjustments, Goldman Sachs highlights the ongoing role of central bank purchases in supporting gold prices. Central banks worldwide have maintained robust gold buying activity, reflecting efforts to diversify reserves and reduce exposure to the U.S. dollar. This structural demand remains a key pillar of support for gold, even amid shifting macroeconomic conditions.

Strategic Implications for Investors

Goldman Sachs’ updated forecast offers several insights for investors navigating the precious metals market in 2025:

Central Bank Influence: Continued central bank purchases are likely to provide a floor for gold prices, making significant downside moves less likely. Investors should monitor central bank activity closely as a key demand driver.

ETF Trends: Reduced inflows into gold ETFs could weigh on overall investment demand. However, this may present opportunities for long-term investors to enter the market during periods of weakness.

Broader Macro Considerations: Gold’s performance will remain sensitive to broader macroeconomic trends, including inflation expectations, currency movements, and geopolitical risks. A slower easing pace may reduce inflation fears, but persistent uncertainties could still support gold’s safe-haven appeal.

Diversification Role: Gold continues to serve as an effective portfolio diversifier. Investors should assess their allocations to ensure balance, particularly as monetary policy dynamics evolve.

Conclusion

Goldman Sachs’ revised gold price forecast reflects a more conservative outlook for 2025, shaped by expectations of slower monetary easing and moderated ETF demand. While the year-end target has been adjusted downward to $2,910 per ounce, strong central bank buying activity remains a stabilizing force.

For investors, gold retains its value as a diversification tool and a hedge against uncertainties, even as its trajectory appears more measured in the year ahead. Balancing exposure to gold with attention to evolving macroeconomic conditions will be key to capitalizing on its role in a diversified portfolio.