Goldman keeps its $5400 gold target and credits central banks, not interest rates

Goldman Sachs has held its $5400 gold target for 2027 while trimming its near-term view after the Federal Reserve’s rate increase⁴. The bank’s position is that rate increases will not stop the metal¹. It attributes nearly all of its projected 23% price gain through 2027 to central bank purchases running at about 91 tonnes a month⁴.

A second account puts the same figure at the centre of the case, describing central bank gold purchases currently running at 91 tons per month as the most critical support, and more than five times an earlier benchmark³. Goldman’s own latest forecast is for an average of 60 tonnes a month across 2026 and 2027, with global central bank reserve diversification demand cited as the driver¹.

Price action has been softer than the thesis. Gold is down about 22% from its January high but holding a $4300 to $4400 floor amid heavy central-bank buying, exchange-traded fund inflows and tight supply⁶. The recovery in prices was limited after the Federal Reserve moved, in what was the US central bank’s first rate increase since 2023⁷.

Why it matters to investors

The claim being made is about what sets the marginal price. On the conventional reading, higher real rates should weigh on a non-yielding asset. The argument here is that official-sector demand is large enough to override that, which is why the near-term view moved after the Fed while the 2027 target did not⁴.

One framework sets out the test directly: gold should be assessed on real rates, central bank behaviour and institutional confidence, with central banks holding it as a reserve asset⁸. A separate strand ties the buying to reserve composition, citing central bank buying, fiscal concerns and diversification away from US Treasuries, with one asset manager expecting gold to reach US$5,000 an ounce².

That diversification is visible in the Treasury data. China’s holdings of US Treasuries fell to $618 billion in July, the lowest since an earlier period, even as its reported gold additions drew scrutiny⁹.

What to watch

The purchase rate is the variable that carries the thesis. The gap between 91 tonnes a month now^3,4 and the 60 tonnes a month averaged into the forecast¹ is the margin of safety built into the target, and any sustained slowdown removes it.

The second is whether the reported buying is what it appears to be. One account notes that the Bank of China reported far smaller additions for the same months⁹. The third is the $4300 to $4400 floor⁶, which is where the pullback argument is falsified if it breaks.