Goldman Sees ‘Large Upside Risk’ For Gold As The Precious Metal’s Record Run Continues Amid Fed Cut Bets, US Shutdown
Goldman Sachs said surging private investor demand and strong ETF inflows could push gold prices well beyond its current forecast, with the metal already nearing $3,900 amid renewed safe-haven buying.
Goldman Sachs believes gold still has room to climb, with rising private investor demand adding fuel to a rally driven by the U.S. government shutdown and growing expectations of an interest rate cut by the Federal Reserve later this month.
Analysts led by Daan Struyven said inflows into gold-backed exchange-traded funds have been stronger than expected, suggesting investors are turning to the precious metal as a diversification play, according to a Bloomberg report.
They added that this momentum presents a “large upside risk” to Goldman’s current forecast of $4,000 per ounce by mid-2026 and $4,300 by year-end. The bank’s research arm also stated that if 1% of privately held U.S. Treasury assets were to be allocated to gold, prices could approach $5,000 per ounce.
On Wednesday, Gold futures increased by 0.5% to $3,865.15 per ounce. It gained $19.41 on the day. The December gold futures were at $3,889.60, down 0.2% at the time of writing.
The SPDR Gold Trust (GLD) rose 0.16% to close up $0.56, while the iShares Gold Trust (IAU) gained 0.15%, adding $0.11 as of Wednesday’s close.
Gold has climbed about 12% since late August after breaking out of the $3,200–$3,450 range it held for most of the year. Renewed central-bank buying and anticipation of rate cuts have helped lift prices nearly 50% in 2025, pushing the metal past its inflation-adjusted record set in 1980.
The rally comes as Washington slipped into its first government shutdown in almost seven years after lawmakers failed twice to agree on a funding bill. The political standoff has renewed concerns about the nation’s finances and put pressure on the dollar, prompting more investors to turn to gold as a safer bet.
Markets are now pricing in a near certainty that the Fed will lower rates this month, with CME’s FedWatch tool assigning a 94.6% probability of a 25 basis point cut.
Carsten Menke of Julius Baer said a possible delay in Friday’s jobs report due to the shutdown is unlikely to affect the Federal Reserve’s decision, noting that U.S. interest rates remain above the neutral level and that policymakers are likely to move toward easing as the economy slows.
On Stocktwits, retail sentiment for GLD was ‘bullish’ amid ‘high’ message volume, while for IAU it was ‘bearish’ with ‘high’ activity.
The GLD and IAU ETFs have both surged nearly 47% year-to-date.
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