In a research note released on Wednesday, Goldman Sachs analysts Daan Struyven and Lina Thomas argued that the rally is being underpinned by a shift in global financial behavior. The bank believes the current demand is “stickier” than in previous cycles, as buyers are hedging against long-term fiscal sustainability risks and shifting global power dynamics.
Three Pillars of the $5,400 Forecast
1. “Sticky” Private Sector Diversification
Goldman assumes that private investors who bought gold to hedge against macro policy risks (such as fiscal deficits or election uncertainty) will not liquidate their positions in 2026. This creates a “higher floor” for prices. The bank noted that these buyers are increasingly treating gold as a structural portfolio holding rather than a short-term trade.
2. Central Bank Accumulation (The “De-Dollarization” Bid)
Emerging market central banks are expected to remain aggressive buyers, with Goldman forecasting average purchases of 60 tonnes per month throughout 2026.
- The Trust Gap: The ongoing trend of reserve diversification away from the US dollar—accelerated by geopolitical tensions—is viewed as a structural shift that will persist for at least another three years.
3. Federal Reserve Easing and ETF Inflows
The bank anticipates the U.S. Federal Reserve will cut interest rates by 50 basis points in 2026. Lower rates traditionally boost gold by reducing the “opportunity cost” of holding a non-yielding asset. Goldman expects this to drive Western ETF holdings higher, adding a fresh layer of demand to the market.
Comparing the 2026 Gold Forecasts
Goldman Sachs now holds the most aggressive target among major Wall Street institutions for the end of 2026.
| Institution | End-2026 Forecast | Key Driver |
| Goldman Sachs | $5,400 | Private diversification & Central Bank buying |
| J.P. Morgan | $5,055 | Fed rate cuts & ETF inflows |
| Citi Research | $5,000+ | Safe-haven demand & Geopolitical risk |
| Deutsche Bank | $4,950 (High) | Institutional rebalancing |
| Commerzbank | $4,900 | “Greenland dispute” & safe-haven bids |
Market Context: The “Greenland” Volatility
The forecast update arrived as spot gold hit an all-time peak of $4,887.82 on Wednesday, January 21. However, prices saw a brief “tactical pullback” toward $4,820 on Thursday morning following news that U.S. President Donald Trump had withdrawn a controversial European tariff threat linked to his bid for Greenland, which temporarily strengthened the US dollar.
Conclusion: A New Price Floor
Goldman Sachs’ revision to $5,400 suggests that the “glitter” of gold is far from fading. For investors, the takeaway is clear: the bank believes we have entered an era where geopolitical and fiscal insurance is worth more than ever before. If central bank accumulation continues at its current pace, the $5,000 mark may be just a brief milestone on the way to a much higher 2026 peak.
