Anthony Kim, Head of Metals Trading at Goldman Sachs, said gold’s relative weakness since February does not mark the end of this bull market, but merely a "prolonged pause". Over the medium term, gold prices still have potential to hit new all-time highs. He also noted that if gold dips toward $4,000 around the Federal Reserve’s September FOMC meeting amid data-driven volatility, investors may consider building long positions in batches.

Gold Price Pullback Is Merely a "Pause"

During a Goldman Sachs podcast interview, Kim was asked whether gold had peaked after touching an all-time high of $5,589.38 per ounce in late January. He stated clearly: "From our perspective, this is not the end of the bull market; it is a prolonged pause."

He believes this pause, lasting more than seven months, stems mainly from two factors. First, Warsh was nominated and subsequently confirmed as the new Fed Chair, and the market is assessing his policy reaction function and leanings, especially against the backdrop of the Trump administration and its statements on Fed policy. Second, the Iran conflict has affected global gold reserve accumulation. Disruptions in energy markets have disturbed some reserve capital that historically flows back into precious metals markets.

Kim said market positioning has undergone substantial adjustment. "We have seen notable reductions in positions across a large number of client books." Still, he emphASIzed that the major peRSIstent capital flow comes from continued gold purchases by central banks worldwide. "At a high level, we think this is just a pause, the bull market trend will eventually resume, and new highs will emerge in the future."

Support Around $4,000

When discussing whether opportunity costs and high yields will continue to cap gold’s upside, Kim pointed out that the trend of fiat currencies depreciating against gold has peRSIsted for several years. If fiscal sustainability becomes the core driver for investors allocating to gold, traditional correlations between related assets may start to break down.

For example, fiscal sustainability concerns are emerging in Western nations and Japan. A rise in long-dated bond yields triggered by fiscal issues may instead drive capital toward gold. "Locally, we expect the correlation between rates and gold to remain, but over the longer term, this trajectory is clearly being questioned."

Kim also mentioned that recent policy shifts by the US government reinforce this narrative, including foreign exchange market interventions, especially for USD/JPY, and US Treasury buybacks of longer-term Treasuries intended to reshape the yield curve structure. "Whenever official policy intervention is observed, investors tend to buy gold," he said. Even after July’s FOMC meeting and the Jackson Hole symposium over the summer, client activity has remained very active over the past month. Many clients are seeking convexity strategies and adjusting positions continuously as data releases roll out.

He stated the real challenge lies not only in how the market interprets policy, but in the data itself. "The figure I am watching most closely is August CPI, which will be the last major inflation indicator ahead of the Fed’s September rate decision." Kim said the market’s reaction to this data will determine whether it further bets on a September rate hike and flattens the yield curve, or creates greater uncertainty around the Fed’s reaction function.

"Based on how the market interprets the data, we will have a clearer picture of gold’s next directional bias," he added. Kim remains bullish on gold and thinks the market needs more data releases and the Fed’s next move after Jackson Hole. In terms of price levels, $4,000 represents a "fairly solid bottom" supported by sovereign buying and institutional capital. "If you get an opportunity to scale into longs near $4,000 amid data volatility around the FOMC meeting, that is where you want to build long exposure."

Goldman Sachs Research Raises Long-Term Target

On September 2, Goldman Sachs Research stated that driven by ongoing diveRSIfication of foreign exchange reserves among central banks and investors using gold derivatives for risk hedging, gold will rise to $4,900 per ounce by the end of 2026. The bank also warned that increased derivative usage may lift gold volatility.

Goldman Sachs Research analysts Lina Thomas and Daan Struyven wrote that gold will extend its recent rally in the second half of 2026, though greater usage of gold-linked derivatives may bring higher price swings. The bank projects precious metals to reach $4,900 as central banks continue reserve diveRSIfication and the market trims expectations for Fed rate hikes in 2026.

The analysts argue central bank demand is the key structural factor supporting gold gains. "We continue to see central bank gold purchases within a multi-year trend, as central banks hedge geopolitical and financial risks via reserve diveRSIfication, consistent with recent survey results," Thomas and Struyven said.

Goldman Sachs Research estimates central banks will buy an average of 50 tonnes of gold per month in 2026, up from the 17-tonne monthly average seen in the years before 2022. According to the bank’s real-time estimates of central bank activity, sovereign purchases accelerated to a seasonally adjusted 100 tonnes per month on a three-month bASIs in June 2026, up from 66 tonnes the prior month, with the PBoC confirmed as the largest buyer in June.

Another factor lifting gold prices recently is shifting rate expectations. The report notes that as the market scales back Fed hike expectations for 2026, demand from some investors is rebounding from the slump seen in the first half of the year. "We expect Fed-related headwinds to fade further because our economists project lower inflation trends will keep the Fed on hold this year," the analysts wrote.

Goldman Sachs Research also pointed out that a continued gold rally may approach key strike prices for some call options, forcing dealers shorting these options to buy gold for hedging and amplifying upward momentum. Conversely, if gold falls, dealers may sell gold positions and create heavier downward pressure on prices. The bank said its $4,900 forecast for 2026 does not account for further rising hedging demand from gold derivatives, meaning the forecast carries greater upside risks but also implies more pronounced two-way volatility in gold prices.

Overall, both the trading and research teams at Goldman Sachs converge on one core conclusion: the current gold pullback looks more like a periodic consolidation within an uptrend rather than the end of the cycle. If US inflation data and Fed policy signals further reinforce rate-cut expectations, paired with central bank buying and geopolitical risks, gold will likely remain strong over the medium term.