Here's why Goldman Sachs sees further upside in gold prices

Global banking institutions are forecasting that the price of gold will remain elevated throughout 2025, with the potential to reach a record high of $3,000 per ounce. 

This projection is primarily attributed to heightened geopolitical uncertainty around the world, which is driving investors towards safe-haven assets like gold.

Additionally, Goldman Sachs, a prominent investment bank, has recently revised its price target for gold upwards, according to a Reuters report. 

This revision is based on the anticipation of sustained demand from central banks, further reinforcing the positive outlook for gold prices.

Gold price revision

Goldman Sachs has revised its year-end 2025 gold price forecast upwards, from the previous estimate of $2,890 per ounce to a new target of $3,100 per ounce. 

This adjustment reflects a more bullish outlook on the precious metal, suggesting that the bank anticipates significant price appreciation in the coming months.

The upward revision may be attributed to several factors, including expectations of continued economic uncertainty, ongoing geopolitical tensions, and the potential for further weakening of the US dollar. 

These factors could drive increased demand for gold as a safe-haven asset, pushing its price higher.

Goldman Sachs' revised forecast could have implications for investors, as it suggests that gold may offer attractive returns in the medium to long term. 

This could lead to increased investment in gold-related assets, such as gold bullion, gold ETFs, and gold mining stocks.

Impressive streak

This recent gain in gold prices adds to an impressive streak for the precious metal, which has achieved eight record highs since the start of the year. 

The current price reflects an 11% increase compared to the same period last year, underscoring gold's strong performance in the current market.

Moreover, gold's recent rally is attributed to heightened central bank demand for the safe-haven asset and US President Donald Trump's aggressive trade policies.

Goldman Sachs said:

"However, if policy uncertainty--including tariff fears--stays high, higher speculative positioning for longer could push gold prices as high as $3,300/toz by year-end."

Additionally, the bank has revised its central bank gold demand assumption from 41 tonnes to 50 tonnes per month this year.

Global gold demand reached a record high of 4,974.5 tons in 2024, marking a 1% increase from the previous year, according to data from the World Gold Council.

Recently, Citi Bank also raised its near-term (0-3 months) price target for gold from $2,800 to $3,000 per ounce earlier this month.

Gold prices rise on Tuesday

Spot gold prices experienced an upswing on Tuesday, following a record-breaking surge to $2,964.10 per ounce on COMEX on February 11. 

On Tuesday, gold prices rose despite an appreciation in the dollar index. 

Safe-haven demand increased in the market after a drone strike on a Russian fuel station raised concerns about an escalation in the ongoing war against Ukraine. 

In addition, safe-haven inflows for gold remained strong amid uncertainty about Trump’s tariff plans.

Even though Trump has delayed his plan to impose reciprocal tariffs on US trading partners till April, the financial markets remained on their toes. 

Recent reports also revealed that the European Union was mulling over controlling imports from the US.

This could further worsen the trade rhetoric between the US and the EU. 

Last week, Trump implemented a 25% tariff on all steel and aluminum imports, escalating concerns about potential retaliation from other countries.