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Goldman Sachs believes gold prices will surpass $4,000 in the future if investors increase their buying.

Goldman Sachs has said that gold prices may rise well above the $4,000 per troy-ounce baseline in mid-2026 if private investors increase their investment.

On Wednesday, spot gold prices reached a record-high of $3,578.50 an ounce, on the expectation of a U.S. Federal Reserve rate cut this month. Meanwhile, global uncertainty remained a major factor in driving demand for safe havens.

Goldman Sachs stated in a Wednesday note that "Gold is our strongest long-term recommendation."

The forecast assumes that central banks will continue to buy gold, which would result in a price of $3,700 per ounce by the end 2025, and $4,000 per ounce by mid-2026. This baseline view, however, does not take into account a significant shift in private investor sentiment from U.S. dollars to gold. A scenario like this could drive prices as high as $4.500 per ounce. The report also stated that the loss of Fed autonomy could lead to higher inflation, an increase in long-end bonds yields, a weakening of equities and a decrease in the dollar’s reserve currency status. Gold, however, would benefit as it is not dependent on institutional trust.

Donald Trump, the U.S. president, has increased his efforts to exert influence over the Fed. The Fed's ability to effectively manage inflation is widely viewed as requiring independence from political influences over interest rate decisions.

Goldman Sachs estimated that if all other factors remained constant, the gold price could reach $5,000 per troy-ounce if just 1% of private money invested on the U.S. Treasury Market was reallocated into gold.

(source: Reuters)