Goldman Sachs' $4,900 Gold Forecast: Is
a 2026 Rally Possible?

In its most recent research, one of the major global investment banks and financial services firms, "Goldman Sachs", predicted that gold prices will reach $4,900/oz by December 2026, regardless of investors' continued doubts over the gold's future price.  This implies a potential upside of approximately 22% in gold prices over the next year. However, let's consider whether this forecast is based on market optimism or is realistic.

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Let’s understand the momentum in the Gold:

When it comes to prices, momentum is a somewhat interesting phenomenon.  It took almost the entire history of gold until 2009 for the price to reach $1,000/oz. It reached $2,000/oz in early 2020, and by 2022, it had remained comfortably over that amount.  In 2025, the rally picked up even more speed; gold reached $4,000/oz by October after crossing $3,000/oz in March.

Just seven months have passed since the previous $1,000 change in gold prices. Goldman Sachs now projects that by the end of 2026, spot gold prices might hit $4,900/oz. It might occur even more quickly or climb even higher if prior experience acts like a guide.

Why Goldman Sachs is Bullish on Gold?

Since the end of last year, Goldman Sachs has maintained its bullish outlook on gold.  Since the beginning of 2025, gold has actually already increased by more than 53%.  In order to boost demand, the bank anticipates a number of reasons, including extended U.S. government shutdowns, persistent inflows into gold ETFs, ongoing central bank purchases, declining global interest rates, and a gradual de-dollarization trend.

Gold has returned to prominence as a result of these macro and geopolitical issues that have kept investors searching for safe-haven investments. Goldman predicts that gold will rise another 22% over the course of the upcoming year and may continue to be the best-performing asset class in 2026 if current trends continue.

More Fundamental Issues: 

The Russia-Ukraine crisis in 2022 marked the beginning of the true change in perception regarding dollar-based assets. The United States alarmed central banks throughout the world when it placed sanctions on Russia and blocked the majority of its dollar assets. Many became aware of the possibility of political leverage affecting their dollar reserves. 

Central banks started diversifying their holdings into gold and away from foreign currencies in order to reduce that risk. In addition to China and India, this surge in central bank gold purchases signalled the start of a significant demand cycle in a number of emerging nations. This extension is probably going to last for a while, giving the yellow metal more strength.

What Should Retail Investors Do?

Is it appropriate for individual investors to increase their gold holdings? While a few opportunistic purchases are OK, it shouldn't take priority over one's entire financial strategy. 10% to 15% of one's overall portfolio should still be allocated to gold, mainly as a hedge against uncertainty.

When markets underperformed last year, gold served as a defensive asset. Recency bias, however, should be avoided by investors because gold prices have historically experienced prolonged periods of decrease or stagnation. Chasing short-term momentum is not nearly as crucial as maintaining asset allocation discipline. Balance is more important in investing than hype.

However, after the sharp rally in the last few years, this week (after Diwali), the prices of gold have corrected by around 2-3%. According to analysis, the correction in gold prices appears to be due to technical in nature, following an exceptional period where it rose over 50% since the start of the year.

Key Takeaway:

The current price of gold is around $4100/oz, approximately. and the highest price of gold is around $4380/oz, approx. The $4,900/oz target set by Goldman Sachs highlights ongoing inflation concerns, de-dollarization trends, and global uncertainty.

Investors should view gold as a stabilizer rather than a growth engine, even though it may continue to shine in the near future. 10% to 15% portfolio allocation towards gold is advisable. The attractiveness of gold ought to strengthen the equilibrium of your portfolio rather than distort its long-term outlook.