Goldman Sachs sees gold at $3,700 by end-2025

April 14, 2025 (MLN): Goldman Sachs has raised its end-2025 gold price forecast to $3,700 per ounce from $3,300, citing stronger-than-expected demand from central banks and higher exchange-traded fund (ETF) inflows driven by recession risks.

The bank now projects a price range of $3,650-$3,950 for the precious metal.

"If a recession occurs, ETF inflows could accelerate further and lift gold prices to $3,880 per troy ounce (toz) by year-end," Goldman Sachs said in a note dated Friday.

"That said, if growth surprised to the upside on reduced policy uncertainty, ETF flows would likely revert to our rates-based predictions, with year-end prices closer to $3,550/toz."

Spot gold prices hit another record high on Monday at $3,245.42 per ounce as the market weighed ongoing tariff developments.

The White House has exempted smartphones and computers from “reciprocal” U.S. tariffs, although President Donald Trump warned that levies were still likely at some point.

The bank now expects average monthly central bank demand to reach 80 tonnes, up from a prior estimate of 70 tonnes and significantly higher than the 17-tonne average seen before 2022.

A strong resurgence in gold-backed ETF investment has also been noted, spurred by rising recession fears, as Reuters reported.

Goldman Sachs economists now place the probability of a U.S. recession in the next 12 months at 45%. Gold has already surged over 23% year-to-date in 2024, recently crossing the $3,200/oz threshold.

If monthly central bank purchases rise to 100 tonnes, gold prices could reach $3,810 per ounce by the end of 2025.

In a recession scenario, ETF flows could return to pandemic-era levels, pushing prices up to $3,880.

On the other hand, stronger-than-expected growth tied to easing political uncertainty could limit gains, keeping prices closer to $3,550.

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