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With gold now over $4,000, mainstream analysts are scrambling to raise their gold forecasts.

On Tuesday, Goldman Sachs upped its 2026 gold target to $4,900, citing demand driven by continued central bank buying and a surge of Western investment.

The big investment bank previously called for a $4,300 gold price by the end of ’26.

The research note said “strong structural demand from central banks and easing from the U.S. Federal Reserve” would continue to support the gold price.

Gold has gained over 52 percent this year. Going back to January 2024, the price of yellow metal has surged by over 95 percent.

Western investors largely sat on the sidelines through the early stages of this bull market, as Asian markets led the way. This is particularly apparent when looking at bar and coin demand in the U.S. through the first half of the year. While Chinese bar and coin demand grew by 44 percent year-on-year in H1, Americans were selling their gold. Year-on-year bar and coin sales plummeted by 53 percent through the first six months of 2025. Demand in the second quarter was only 9 tonnes, the lowest quarterly level since Q4 2019.

Inflows of gold into North American ETFs were also relatively tepid earlier in the year.

But the trend has reversed in recent months, as indicated by robust inflows of gold into gold-backed exchange-traded funds. Western investors dumped $64 billion into gold ETFs through September, with $17.3 billion in inflows that month alone.

ETFs are a convenient way for investors to play the gold market, but although many Western investors prefer paper gold, owning ETF shares is not the same as holding physical metal. 

SPDR Gold Shares, the world’s largest gold ETF, increased its gold holdings by 35.2 tonnes in September. It gobbled up 18.9 tonnes of gold in a single day (Sept. 19), the biggest single-day increase on record.

"In contrast, noisier speculative positioning has remained broadly stable,” Goldman analysts said. “Following the large September increase, the level of Western ETF holdings has now fully caught up with our U.S. rates-implied estimate, suggesting the recent ETF strength is not an overshoot." 

Goldman said that there is still untapped demand out there.

“We see the risks to our upgraded gold price forecast as still skewed to the upside on net, because private sector diversification into the relatively small gold market may boost ETF holdings above our rates-implied estimate."

Goldman analysts split gold investors into two groups.

“Conviction buyers tend to purchase the yellow metal consistently, regardless of the price, and based on their view on the economy or to hedge risk.”

On the other hand, there are also “opportunistic buyers” who move in and out of the market based on price.

“They may provide a floor under prices on the way down and resistance on the way up,” the research note said.

Goldman analysts also expect central banks to continue increasing their gold reserves. This dovetails with the World Gold Council’s forecast of central bank buying “close to the range seen over the past three years on continued elevated trade-related risks and uncertainty premia in U.S. assets.” 

The pace of central bank gold accumulation has moderated this year as prices have skyrocketed. However, gold buying was still 41 percent above the quarterly average that was typical between 2010 and 2021.

The World Gold Council notes that while central banks tend to make reserve decisions strategically, they are not totally insensitive to prices.

“As such, gold’s rally so far this year, up 26 percent, to new record levels, has likely contributed to the slowdown in central bank buying. But that they continue to add gold in the face of a higher price underscores their continuing favorable attitudes towards gold as a strategic asset amid such uncertainty.”

The Goldman note also pointed out that “speculative positioning in derivatives markets by large investors like hedge funds appears significantly bullish on gold.”

“The amount of net long gold bets on the futures and options exchange COMEX is in its 73rd percentile since 2014 as speculators build up their long positions betting on gold prices to rise.”

Goldman recommended investors diversify through commodities like gold. 

“Equity-bond portfolios aren’t well protected against stagnant economic growth and elevated inflation in two situations in particular: when global policy uncertainty is elevated (e.g., markets debating the central bank’s ability to contain inflation) and when the economy is hit by a supply shock (such as a sudden interruption in energy supplies). For example, gold prices jumped in the 1970s as pronounced spending by the U.S. government and reduced central bank credibility stoked inflation.”

This dovetails with a recent seismic shift in investing advice by Morgan Stanley CIO Michael Wilson, who recently said investors should consider a 60/20/20 strategy, swapping half of the bond portfolio for gold to serve as a “more resilient” inflation hedge.

"Gold is now the anti-fragile asset to own, rather than Treasuries. High-quality equities and gold are the best hedges.”

If more mainstream advisors embrace this strategy, it could drive gold demand even higher. Currently, only about 38 percent of U.S. investors own any gold at all.

TD Securities and the Correction Risk
 

Many investors worry that gold might be oversold. That raises the specter of a major correction.

TD Securities’ Head of Market Strategy Bart Melek acknowledged this risk as he raised his price forecast to $4,400 by the second quarter of 2026. He called any price drops a buying opportunity.

“The yellow metal looks overbought, which suggests that anything that may question the speed of the Fed's easing, or an increase in volatility, could generate a robust downside. This could see a significant unwind of the late-summer rally in the relative near term.”

He said a drop back to $3,600 wouldn’t be shocking. Nevertheless, he upped his gold forecast with any selloffs offering buying opportunities.

“We expect average price to reach a new record north of $4,400/oz in the first six months of 2026, as the Fed eases into a higher inflation environment, official sector keeps buying and discretionary funds again position long.”

Melek said he thinks a rate-cutting cycle by the Fed will entice some reluctant investors into the market.

“Money managers who likely missed much of the early part of this year's rally, due to their discomfort of getting long while short-term rates were high, have now moved into the yellow metal through the late summer, as their carry costs were expected to drop along with the Fed's renewed enthusiasm to ease.”

Melek noted that not only is the Fed cutting into an inflationary environment, but political pressure could incentivize the central bank to cut faster than it otherwise might.

“The concerns surrounding Fed credibility are raising speculation that there could be de facto partial monetization of U.S. debt, which would suppress real yields as inflation runs above target.”

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