Goldman Sachs expects gold prices ( $EWG2 (-0 %) ) to reach $3,150 per ounce (in their bullish case scenario) by December 2025, an upside of around 19 per cent from the current levels as they remain a good hedge against sticky inflation and rising geopolitical issues.

A large part of this price rise, they believe, will also be fueled by higher demand from global central banks coupled with concerns over US fiscal sustainability and trade tensions/wars.

“We keep our $3,000 December 2025 forecast. The structural driver of our bullish gold forecast is higher demand from central banks (adding 9 per cent to the gold price by December 2025 relative to our November $2,640 forecast)," wrote analysts at Goldman Sachs led by Daan Struyven, their head of commodities research in a recent note.

Rising fears of inflation and fiscal risks, Goldman Sachs said, could drive speculative positioning and exchange traded flows (ETF) flows higher, while US debt sustainability concerns may push central banks, especially those holding large US Treasury reserves, to buy more gold.

“While the boost from central bank demand has outweighed the drag from high interest rates in late 2022-early 2023, we see potentially higher interest rates and a stronger dollar as the main downside risk to our bullish gold forecast,” Struyven said.

Those at UBS, too, expect the gold prices to continue their journey north and hit $2,900 per ounce by December 2025 (earlier: $2885/oz) in their base case. On the upside, they expect the yellow metal to hit the $3,000 an ounce mark by December 2025-end.

In the near term, however, they believe there is scope for gold prices to consolidate, albeit with an upside bias to end the year modestly higher than current spot levels, with their end-2024 target at $2700.

“This would correspond with markets contemplating the macro outlook for the year ahead as we slowly get more insights on what US policies are probably going to look like,” wrote Joni Teves, Precious Metals Strategist, UBS Investment Bank.