As global dynamics shift, even a small allocation to gold can play a powerful role in protecting long-term wealth.
Gold has recently broken out of its previous trading range, rising 14% since late August to around $3,865/toz — up 47% year-to-date.
According to Goldman Sachs, this rally is being driven by three key long-term buyers:
- Rising ETF demand;
- Renewed central bank purchases;
- Moderate speculative interest.
Importantly, speculative positioning has contributed minimally to recent gains, signaling the move is underpinned by more stable, structural demand.
Upside potential
Goldman now sees growing upside risks to their already bullish price targets — $4,000/toz by mid-2026 and $4,300/toz by year-end 2026 — driven by:
- A sharp surge in ETF inflows, far exceeding expectations, suggests private investors are starting to meaningfully diversify into gold.
- A relatively small shift out of developed market fixed income into gold could have a significant impact, as gold ETF holdings remain a small fraction (~1.5%) of privately held U.S. Treasuries.
Strategic case for gold in portfolios
Gold remains Goldman Sachs’ highest-conviction long commodity trade due to:
- Structural demand from central banks;
- Rising interest from private investors;
- Portfolio protection in adverse scenarios — such as global growth slowdowns or waning confidence in developed market policy frameworks — where traditional equity-bond allocations may fall short.
Gold ETF holdings have surged:
Private sector diversification into gold — which is small relative to bonds and equities — may drive the next gold price increase.
The bottom line
With both strong fundamentals and rising investor interest, gold offers a compelling opportunity as part of a diversified portfolio — not just for potential returns, but also as a strategic hedge against macro uncertainty.
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