Gold has hit a rough patch this month, but leading analysts believe the weakness is only temporary. According to Goldman Sachs, the recent dip is more of a short-term correction than the beginning of a prolonged downturn.
Despite the current softness, 2025 has been an exceptional year for gold. The metal surged nearly 75% year-to-date, reaching an all-time high of US$4,336 per ounce on October 30.
Since then, prices have slipped about 6%, trading around US$4,062 on Tuesday.
What’s Behind the Pullback?
One major factor is the strengthening US dollar.
Because gold is priced in dollars, a stronger greenback makes the metal more expensive for international buyers, dampening demand.
This has left investors wondering: is this just a pause in the bull market, or the start of something bigger?
Goldman Sachs firmly believes it’s the former. The investment bank expects gold to climb to US$4,900 by the end of 2026, a gain of roughly 21% from current levels.
Analyst Lina Thomas even sees potential for further upside if private investors continue diversifying into gold alongside traditional stock-and-bond portfolios.
Goldman isn’t alone in its optimism. UBS strategists recently forecast gold could reach US$5,000 by 2026 or 2027, reinforcing the view that the current pullback is a buying opportunity rather than a warning sign.
Interest Rates and Investor Behaviour
The outlook for US interest rates is another piece of the puzzle.
A month ago, markets were confident the Federal Reserve would cut rates in December. Those odds have now fallen below 50%, making Treasuries more attractive compared to gold, which offers no yield.
Still, Goldman remains bullish, citing strong demand from two key sources: central banks and private investors.
Central banks have been accumulating gold since 2022 to reduce reliance on dollar-denominated assets—a trend that accelerated after US sanctions on Russia. Goldman notes that buying activity even ticked higher in September.
Meanwhile, retail and institutional investors continue to pour money into gold-backed ETFs. So far this year, more than US$41 billion has flowed into funds like SPDR Gold Shares (GLD).
While there have been modest outflows of about US$1.2 billion in recent weeks, Goldman expects ETF investors and ultra-high-net-worth individuals to keep accumulating physical gold.
