Goldman Sachs has significantly raised its gold price forecast, projecting the precious metal to reach $4,900 per ounce by the end of 2026, up from its previous target of $4,300. This revision reflects growing and sustained demand, particularly from central banks and Western investors, which the bank says has redefined gold’s valuation baseline.
According to Goldman analysts, gold’s 17% rally since late August is being supported by consistent inflows, especially from exchange-traded funds (ETFs) in Western markets, alongside ongoing central bank purchases. While speculative activity has remained largely stable, these structural inflows have pushed prices higher and appear to be reshaping market dynamics.
In Asian markets, gold traded near all-time highs around $4,000 per ounce on Tuesday, bolstered by increased safe-haven buying amid political uncertainty in the U.S., Japan, and France. Central bank activity—particularly by the People’s Bank of China—along with growing expectations of U.S. Federal Reserve rate cuts, has further fueled the uptrend.
As of 08:42 GMT, spot XAU/USD was trading at $3,952.56, slightly down by 0.2% on the day. However, Goldman maintained a bullish outlook, anticipating a 23% rise in gold prices through the end of 2026. The forecast is driven by expectations of continued reserve diversification by emerging market central banks, which are projected to buy 70–80 tonnes of gold annually during 2025 and 2026.
Goldman estimates that this central bank demand alone could contribute 19 percentage points to the overall price increase, while a potential 100-basis-point rate cut by the Fed by mid-2026 may add another five percentage points through increased ETF inflows. The bank also highlighted that risks to this forecast remain skewed to the upside, especially if private investors begin allocating more capital into the relatively small gold market, which could amplify ETF demand and push prices even higher than projected.
This global momentum has translated into record-high prices in Pakistan as well. On Tuesday, the price of gold reached Rs. 416,778 per tola—an increase of Rs. 1,500 in a single day—according to the All-Pakistan Gems and Jewellers Sarafa Association. The rate for 10 grams also climbed to Rs. 357,319, rising by Rs. 1,286. This followed a sharp increase on Monday, when gold surged by Rs. 5,400 per tola.
The persistent rise in gold prices reflects investor concern over geopolitical tensions and expectations of looser global monetary policy, prompting a strong shift toward safe-haven assets. As uncertainty continues and interest rates soften, both global and domestic markets appear poised for continued upward pressure on gold valuations.