The bank’s base case assumes the Fed’s recent turn toward tighter policy, including another rate hike in December, will curb concerns about currency debasement. Goldman expects demand for gold call options as protection against macro policy risks to retreat toward its historical average, rather than returning to the elevated levels seen in early 2026.

The strategists said current conditions increasingly resemble 2022: central-bank buying provides a strong structural floor, but higher interest rates weigh on investor positioning and limit price gains. Goldman forecasts central banks will buy an average of 60 tonnes of gold a month in 2026 and 2027, against a pre-2022 average of 17 tonnes. Its latest estimate puts current buying at 85 tonnes a month, on a seasonally adjusted three-month basis.

Emerging-market central banks, particularly China’s, remain below what Goldman considers reasonable long-term gold allocations. Developed-market central banks have largely stayed out of the market, partly because they already hold substantial reserves. The strategists said debate is shifting from whether to own gold to where to store it, reflecting wider concerns about reserve security and trust between countries.

Goldman expects the Fed to begin cutting rates in the second half of 2027. Its economists forecast a series of reductions from late 2027 into early 2028, which the bank says could renew private-investor interest. In a bearish scenario involving another hike in March 2027, delayed cuts or a higher peak rate, gold would reach only $4,660 by the end of 2027. A revival in concerns about fiscal sustainability could instead push the price above the $4,800 base-case target. The strategists said the next three to six months may be difficult for CTAs and macro hedge funds, while longer-term investors could view the correction as an entry point.