Goldman Sachs has revised its gold price forecast for December 2026, increasing it to $4,900 per ounce from $4,300. The adjustment is attributed to strong inflows into Western exchange-traded funds (ETFs) and anticipated central bank buying. According to Goldman Sachs, the risks to this upgraded forecast remain skewed to the upside, driven by potential private sector diversification into the gold market, which could further boost ETF holdings.

As of Tuesday, spot gold was trading at approximately $3,960 per ounce, having reached a fresh high of $3,977.19 earlier in the day. This year, gold has surged 51% due to robust central bank buying, increased demand for gold-backed ETFs, a weaker US dollar, and growing interest from retail investors seeking a hedge against rising trade and geopolitical tensions.

Goldman Sachs anticipates that central banks will continue to be significant buyers of gold, with average purchases of 80 metric tons in 2025 and 70 metric tons in 2026. Emerging market central banks are likely to drive this demand as they diversify their reserves into gold. The bank also expects Western ETF holdings to rise, driven by a potential decrease in the US Federal Reserve’s funds rate by 100 basis points by mid-2026.

Despite the recent strength in ETF holdings, Goldman Sachs notes that speculative positioning has remained relatively stable. The level of Western ETF holdings has now caught up with the bank’s US rates-implied estimate, suggesting that the recent ETF strength is not an overshot. With gold prices expected to continue their upward trend, investors will be closely watching central bank buying and ETF demand in the coming months. The revised forecast from Goldman Sachs underscores the growing appeal of gold as a safe-haven asset amidst ongoing economic uncertainty.