Goldman Sachs Research forecasts gold will hit $4900 per ounce by the end of 2026, against a backdrop of ongoing foreign‑reserve diveRSIfication among central banks and receding market expectations for Federal Reserve rate hikes in 2026. The bank also notes rising investor demand for hedging via gold derivatives, which could further amplify gold‑price volatility.

Central‑Bank Purchases Remain Core Support

Goldman Sachs Research analysts Lina Thomas and Daan Struyven state gold is set to extend its recent rally in the second half of 2026, while greater adoption of certain gold‑linked derivatives may bring higher price volatility. The bank regards central‑bank demand as the key structural driver underpinning this gold upswing.

The two analysts describe central‑bank gold accumulation as a multi‑year trend driven by reserve diveRSIfication to hedge geopolitical and financial risks, consistent with recent survey findings. Goldman Sachs Research projects central banks will purchase 50 tonnes of gold per month on average in 2026, well above the pre‑2022 multi‑year average of 17 tonnes monthly.

According to Goldman Sachs Research’s real‑time estimates of central‑bank activity, seasonally‑adjusted three‑month sovereign buying accelerated to 100 tonnes per month in June 2026, up from 66 tonnes the prior month. The People’s Bank of China was the largest confirmed buyer in June.

EASIng Rate Expectations Lift Gold Prices

Besides central‑bank buying, shifting interest‑rate expectations represent another major driver behind gold’s recent advance. Goldman Sachs Research says as markets scale back 2026 Fed‑hike expectations, some investor demand is rebounding from its slump seen in the first half of this year.

Bank analysts write that Fed‑related headwinds should weaken further, as their economists expect moderating inflation trends will keep US interest rates unchanged this year. In other words, should the rate path tilt toward looser policy or steady settings, the relative appeal of non‑yielding gold may keep improving.

Derivatives Hedging May Magnify Two‑Way Volatility

Goldman Sachs also warns that as gold marches higher, key strike levels on gold call options may get triggered progressively. This forces dealers who sold these calls to buy gold for hedging, which pushes prices even higher. Conversely, if gold pulls back, dealers may unwind positions and sell gold holdings, accelerating price declines.

The bank observes growing demand among investors to hedge portfolios with gold call options against abrupt large‑scale shifts in government policies. Such activity can amplify both upward and downward price swings. Goldman Sachs’ $4900 per‑ounce forecast for 2026 does not incorporate this extra hedging‑driven demand from gold derivatives. Therefore the forecast carries greater upside potential yet also points to “larger two‑way volatility” for gold.

Medium‑Term Upside Risks Remain Intact

Goldman Sachs Research further points out gold still accounts for a low share in private investment portfolios. Recent geopolitical developments including tensions over Iran and broader global frictions may push private investors toward further portfolio diveRSIfication, a shift that could speed up amid market concerns over Western fiscal sustainability.

Overall, Goldman Sachs’ latest assessment means gold’s outlook is supported not only by sustained central‑bank buying and shifting rate expectations, but also by position adjustments across derivative markets, which have become a critical variable shaping price action. For precious‑metals markets such as gold and silver, simultaneous rises in safe‑haven and hedging demand may result in even wider price swings.