Central banks are buying, markets are feverish: Goldman Sachs predicts gold at $3.7 thousand
14 April 20:35
American investment bank Goldman Sachs has revised its forecast for the precious metals market, raising its expected gold price to $3,700 per ounce by the end of 2025. This is the third increase in the target level since the beginning of the year, "Komersant Ukrainian" writes with reference to Reuters.
According to the bank’s analysts, the gold market is entering a new phase of steady growth amid rising global uncertainty, demand from central banks and the threat of a US recession.
The main factors of the forecast
1. Record gold purchases by central banks
Since the beginning of 2022, central banks have been unprecedentedly active in the gold market, buying the metal in record volumes. Goldman Sachs raised its estimate of average monthly purchases from 70 to 80 tons per month. The central banks of China, India, Turkey, Kazakhstan, and the Persian Gulf countries are particularly active.
These purchases are often not immediately publicized and are reflected in statistics with a delay, which creates additional tension in the market. This demand is due to:
- a desire to reduce dependence on the US dollar amid Western sanctions,
- protection of reserves from geopolitical risks,
- reorientation of foreign exchange reserves to real assets.
2. Probability of a recession in the US
Goldman estimates the probability of a recession in the US at 45% over the next year. If the negative scenario is confirmed, the Federal Reserve may be forced to cut interest rates or ease monetary policy, which will only increase demand for gold as an asset that does not generate income but retains value.
Investors are increasingly turning to gold as a hedge against dollar volatility, banking sector weakness, and inflationary risks.
3. Geopolitical tensions and market restructuring
The war in Ukraine, the escalation of the situation around Taiwan, instability in the Middle East, and uncertainty around the 2024-2025 US presidential election create the most favorable environment for gold growth.
In addition, the trade wars between the US and China, the spread of sanctions, and changes in the structure of global supply chains are increasing the overall demand for anchor assets.
4. Technical factors and market sentiment
As of April 11, 2025, the gold price has already reached an all-time high of $3,245.28 per ounce, which is 28% higher than the lows of November 2024. Analysts point out that the next technical levels may be $3,400, $3,500 and $3,700, which are currently considered realistic in the current market trend.
Gold ETFs (exchange-traded funds) are also recording capital inflows. According to Bloomberg, in March-April 2025, ETFs investing in gold recorded the largest inflows since 2020.
Read also: Gold set a historic record: how it will affect the global economy
Reaction of other market players
Goldman Sachs was not the only one to revise its forecasts.
UBS raised its forecast to $3,500, pointing to a structural shift to long-term inflation. And Bank of America confirmed a similar assessment, adding that gold is “the best long-term insurance against global instability.”
Goldman Sachs’ sharp upward revision of its forecast indicates a deeper shift in the global financial system. Gold’s steady rise is not just a temporary reaction to stress, but a sign of a redefinition of the role of money, confidence in currencies, and capital redistribution in a world that is increasingly living in a risky, not predictable, environment.
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