Gold trades close to its all-time peak after Goldman Sachs raises its year-end projection to $5,400

Gold Prices Approach All-Time Highs Amid Investor Surge

Gold futures remained close to their highest levels ever, trading above $4,870 on Thursday. This comes after analysts at Goldman Sachs increased their price target for the precious metal, attributing the rise to a wave of private sector investment fueling the rally.

In a recent note, Daan Struyven and his colleagues at Goldman Sachs stated, “We are lifting our December 2026 gold forecast to $5,400 per ounce, up from our previous estimate of $4,900, as the private sector’s move to diversify into gold—an upside risk we previously highlighted—has begun to materialize.”

The team anticipates that private investors who have shifted into gold are unlikely to sell in the near term, which should help maintain elevated prices throughout the year.

Goldman Sachs pointed out that while central banks were the primary drivers of gold’s gains in 2023 and 2024, the pace of the rally picked up in 2025. This acceleration was due to increased competition for limited gold supplies between central banks and private investors, especially through traditional ETF channels, a trend intensified by Federal Reserve interest rate cuts.

Another factor supporting gold’s climb is the so-called “debasement theme”. Wealthy families have been purchasing more physical gold, and heightened activity in investor call options has added further momentum to the market.

“Although there are risks on both sides of our revised gold price outlook, we believe the potential for further gains remains significant, especially if private investors continue to diversify amid ongoing global policy uncertainty,” the analysts added.

Goldman Sachs projects gold futures could hit $5,400 before year-end. (Jonathan Raa/NurPhoto via Getty Images)

Geopolitical Events Drive Gold Higher

This year, gold prices have surged in response to major geopolitical developments, such as the U.S. apprehension of Venezuelan leader Nicolas Maduro and tariff threats from President Trump related to Greenland.

On Wednesday, President Trump announced that a “framework for a future agreement” regarding the Arctic region had been established, and that new tariffs on European Union countries would not be imposed.

Although gold futures experienced a brief dip overnight, they quickly rebounded and are once again nearing record highs.

So far this year, gold has climbed approximately 11%, building on a nearly 65% increase since 2025.

Analysts Recommend Gold Allocation Amid Uncertainty

UBS strategists commented on Thursday that “the metal has once again demonstrated its value as geopolitical tensions escalate.”

Ulrike Hoffmann-Burchardi, Chief Investment Officer Americas and Global Head of Equities at UBS Wealth Management, wrote, “For those who favor this asset class, we suggest maintaining a mid-single-digit percentage allocation within a diversified USD portfolio.”

UBS has set a price target of $5,000 per troy ounce for gold, with the potential for prices to reach $5,400 if geopolitical risks intensify.