Why gold prices are forecast to rise to new record highs

Gold is increasingly in focus among traders, investors — and central banks.

The precious metal, which has been used as a financial asset for millennia, is prone to dizzying rallies and deep slumps. But despite the commodity’s volatility, gold has repeatedly set records in recent years.

Since March, investors have been increasing their holdings of gold, driven by concerns about the health of the economy and market volatility. Longer term, Goldman Sachs Research expects prices to be propelled by multi-year demand from central banks. Our analysts’ gold price prediction is for these two factors to push the metal to new record highs.

Goldman Sachs Research’s gold price prediction 2025

Even so, Thomas says gold is likely to break more records this year. Goldman Sachs Research predicts gold will rise to $3,700 a troy ounce by the end of 2025 (from $3,220 on May 15) as central banks buy many tonnes of the precious metal every month.

The commodity is also likely to climb as ETF investors increase their holdings in anticipation of interest rate cuts and amid growing recession concerns. In the event of a recession, Goldman Sachs Research forecasts that gold could rise to as much as $3,880 a troy ounce.

Private investors might also turn to gold to diversify away from US assets, particularly if traditional equity portfolio hedges such as US Treasuries continue to underperform during equity drawdowns. While not the team’s base case forecast, Thomas says even a small rotation out of US assets into gold would have a big, positive impact on the gold price given the relative sizes of the markets. For example, global gold ETF holdings are worth only about 1% of outstanding US Treasuries and 0.5% of the S&P500 market cap.

“While the key factor since 2022 used to be central bank buying alone, ETF investors are now joining the gold rally,” Thomas says. “As both compete for the same bullion, we are expecting gold prices to rise even further.”

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