Bullish on Gold: Goldman Sachs Forecasts Price Jump to $2,900 by 2025

Goldman Sachs predicts a 9% surge in gold prices by early 2025, driven by falling interest rates, strong central bank demand, and geopolitical tensions.

Editorial Team (ET)June 23, 2025

Gold has been on a stellar run throughout 2024, and according to Goldman Sachs, this rally is far from over. The investment giant has raised its price target for gold to $2,900 per troy ounce by early 2025, signaling a potential 9% increase from current levels. The bank cites falling interest rates, increasing central bank demand, and ongoing geopolitical tensions as key drivers for this bullish forecast. Let’s explore why Goldman Sachs believes gold is poised for continued gains in the coming year.

Gold’s Performance in 2024: A 29% Rally

Gold has surged by 29% year-to-date, outperforming many other assets and reaffirming its role as a safe haven in times of uncertainty. The price of gold has steadily climbed, driven by fears of inflation, global recession concerns, and weakening currencies. Investors have sought refuge in the precious metal, turning to it as a store of value amid turbulent markets.

Goldman Sachs' Price Target for 2025: $2,900 per Ounce

Goldman Sachs recently boosted its gold price target from $2,700 to $2,900 per troy ounce, indicating a projected 9% increase. According to the bank’s note, several factors are expected to sustain the upward momentum in gold prices. Lower global interest rates, strong demand from central banks—especially in emerging markets—and geopolitical tensions are all set to drive gold to new highs.

Falling Interest Rates: Fueling Gold’s Rise

Interest rates and gold prices have long had an inverse relationship. When interest rates fall, the opportunity cost of holding gold decreases, making it more attractive to investors. As central banks around the world continue to lower interest rates to stimulate economic growth, gold stands to benefit. Goldman Sachs highlights that this gradual decline in interest rates will provide a steady boost to gold through 2025.

Surging Central Bank Demand

Emerging market central banks have been pivotal in driving the recent surge in gold prices. Countries like China and Russia have been ramping up their gold reserves, contributing to a structural increase in demand. In fact, Goldman Sachs estimates that central banks' purchases will account for about two-thirds of the expected rise in gold prices over the next year. China’s strategy of diversifying its reserves away from the U.S. dollar is particularly noteworthy, as it underscores the geopolitical importance of gold in global financial markets.

Geopolitical Tensions and Economic Uncertainty

Gold's appeal as a safe-haven asset is magnified during times of geopolitical unrest and economic instability. With tensions rising in various parts of the world, including the potential for conflict between Israel and Iran, investors are increasingly turning to gold to hedge against uncertainty. Goldman Sachs notes that these ongoing risks—ranging from the upcoming U.S. Presidential election to the potential for broader global conflicts—are likely to keep gold top of mind for risk-averse investors.

Institutional Investors and the London OTC Market

Institutional investors have also played a key role in the gold market's strength. In the London OTC market, institutional purchases of gold have been robust, with an annualized average rate of 730 tons through 2024. This strong demand from institutional players is another factor supporting higher gold prices. Goldman Sachs expects institutional interest to remain elevated, further contributing to gold's projected price increase.

Global Risks Ahead: Presidential Elections and Economic Slowdowns

Looking ahead to 2024 and beyond, several global risks could further propel gold prices. The U.S. Presidential election always introduces an element of market volatility, and the 2024 election is expected to be no different. Historically, gold prices have risen during election years as political uncertainty prompts investors to seek safety.

Additionally, fears of a global recession persist, driven by inflationary pressures, supply chain disruptions, and geopolitical instability. The ongoing East Coast port strike, for example, has the potential to create further economic turmoil in the U.S., potentially driving more investors toward gold as a protective measure.

Conclusion: Gold Set for Continued Gains

Gold's future looks bright, with Goldman Sachs projecting a 9% rise in prices by early 2025. The combination of falling interest rates, strong demand from central banks, and rising geopolitical tensions creates a supportive environment for gold to continue its ascent. For investors seeking stability amid a volatile global landscape, gold remains one of the most reliable stores of value.

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