Goldman Revises Timeline for Gold Price Milestone Amid Fed Policy Shifts

January 06, 2025 07:10 PM AEDT | By Team Kalkine Media

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Goldman Revises Timeline for Gold Price Milestone Amid Fed Policy Shifts — Image source: Shutterstock

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Highlights

Goldman adjusts gold price forecast timeline to 2026.

Central bank demand continues to support gold prices.

U.S. rate cuts expected to moderate, influencing predictions.

Goldman Sachs has updated its projection for gold prices to reach $US3000 an ounce, revising the timeline to the second quarter of 2026 from its earlier estimate of December 2025. This adjustment reflects changes in the outlook for U.S. Federal Reserve monetary policy and its impact on market dynamics.

The investment bank now anticipates a 0.75 percentage point reduction in U.S. interest rates this year, compared to the previously expected 1 percentage point. This more moderate pace of rate cuts influences the timeline for gold to achieve the projected price level, as interest rates play a pivotal role in the precious metal’s performance. Lower interest rates generally enhance the appeal of gold by reducing the opportunity cost of holding the asset.

Central bank activity remains a key factor in Goldman's forecast. Consistent and robust purchases of gold by global central banks provide significant support to its value. The metal is viewed as a hedge against economic uncertainties and currency fluctuations, driving institutional demand even amid shifting monetary policies.

Exchange-traded funds (ETFs) linked to gold are also expected to see a gradual increase in holdings. With a softer trajectory for U.S. rate cuts, ETF inflows are projected to contribute to the price momentum as interest rates ease over time. This combination of factors underscores Goldman's confidence in the upward trajectory of gold prices, albeit on a slightly extended timeline.

Gold was recently trading at approximately $US2640 an ounce, marking a steady climb driven by its safe-haven status and ongoing macroeconomic factors. While market conditions remain fluid, the demand from institutional entities like central banks and incremental inflows into ETFs signal continued support for gold prices in the longer term.

The delay in achieving the $US3000 milestone highlights the interplay of global economic policies, market demand, and investor sentiment. However, the strategic positioning of gold as a resilient asset ensures its relevance in diversified portfolios, particularly during periods of uncertainty and monetary easing.

Gold enthusiasts and market observers will closely monitor central bank purchases, ETF trends, and U.S. rate policies as key indicators shaping gold’s journey toward this significant price target.

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