Goldman: Gold to Grind Higher to $5,400/Oz by End-2026 on Strong Demand
•February 20, 2026
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Why It Matters
The outlook underscores gold’s continued appeal as a hedge amid easing monetary policy, influencing portfolio allocations and central‑bank reserve strategies. Investors and policymakers must monitor diversification dynamics that could amplify price swings.
Key Takeaways
- •Gold price target $5,400/oz by 2026.
- •Central banks drive primary demand surge.
- •Private investors add exposure after Fed cuts.
- •Upside risk if diversification expands via options.
- •Volatility may rise around policy pivots.
Pulse Analysis
Gold’s status as a safe‑haven asset is being reinforced by Goldman Sachs’ latest medium‑term outlook, which projects a steady climb to $5,400 an ounce by 2026. Central banks, historically the largest institutional buyers, are expected to re‑accelerate purchases at the pace seen in 2025, providing a solid demand floor. This institutional momentum comes at a time when global monetary policy is gradually easing, creating a macro environment that favors non‑yielding assets and bolsters gold’s defensive appeal.
On the demand side, private investors are poised to add modest exposure, largely in response to anticipated Federal Reserve rate cuts. The bank’s base case assumes these investors will continue to allocate a small portion of portfolios to gold without triggering a wholesale diversification wave. However, Goldman highlights that if diversification intensifies—particularly through call‑option structures that amplify upside participation—the price trajectory could outpace the $5,400 target, introducing asymmetric upside potential. Such mechanisms allow investors to gain leveraged exposure, potentially accelerating price moves during bullish momentum.
For market participants, the forecast signals both opportunity and caution. While the upward trend supports bullish positioning, Goldman warns of sustained volatility, especially around Fed policy pivots, geopolitical shocks, or sudden shifts in private‑sector diversification. Asset managers should therefore balance exposure with risk‑management tools, such as options or diversified commodity baskets, to navigate potential price swings. Understanding the interplay between central‑bank buying, private investor behavior, and policy dynamics will be crucial for anyone seeking to capitalize on gold’s medium‑term outlook.
Goldman: Gold to grind higher to $5,400/oz by end-2026 on strong demand
Goldman sees gold grinding higher to $5,400/oz by end-2026, with upside skew from diversification.
Summary:
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Goldman expects central bank gold buying to re-accelerate in 2026 at the pace seen in 2025.
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This is in a conservative base case that assumes no additional private-sector diversification beyond current trends.
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Goldman’s core view: central bank demand plus private investors adding exposure mainly in response to Fed rate cuts supports a steady rise.
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House forecast: gold to “slowly grind higher” to $5,400/oz by end-2026.
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Goldman flags significant upside risk if private-sector diversification increases, especially via call-option structures.
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Medium-term trajectory remains upward, but with potentially elevated volatility
Goldman Sachs expects the gold market’s structural bid to remain intact through 2026, driven primarily by central bank demand and a more cyclical pickup in private investor participation tied to the Fed easing cycle.
In its 2026 outlook, Goldman says it expects central bank gold buying to re-accelerate at the pace seen in 2025, even under a conservative base case that assumes no additional private-sector diversification beyond what is already embedded in current flows. In other words, the bank’s base case does not rely on a fresh wave of private actors rotating reserves or portfolios into gold; it assumes official-sector demand does most of the heavy lifting.
Taken together, Goldman argues that (1) central bank buying and (2) private investors adding exposure largely in response to Fed rate cuts should be sufficient to push prices higher over time. The bank characterises the path as a “slow grind” rather than a straight-line surge, projecting gold to reach $5,400 per troy ounce by end-2026.
However, Goldman sees meaningful asymmetry around that forecast. It highlights significant upside risk if private-sector diversification does expand materially, particularly if expressed through call-option structures, which can amplify upside participation and accelerate price moves during momentum phases.
Net, Goldman’s medium-term trajectory for gold remains upward, but it explicitly warns that the ride could be choppy: the trend may be higher, yet volatility could stay elevated, especially around Fed policy pivots, risk shocks, and any renewed diversification wave.
This article was written by Eamonn Sheridan at investinglive.com.
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