Goldman Sachs, UBS Raise Gold Price Forecasts for 2025

Goldman Sachs Ups Long-Term Gold Price Outlook

Goldman Sachs has updated its 2025 gold stock outlook, raising its long-term gold price assumptions. In a report on Thursday, the firm increased its long-term gold price forecast from 2029 onward from $2,850/oz to $3,300/oz. Goldman Sachs stated that its global commodities team “remains bullish on gold” and outlined upside risks to $4,500-5,000/oz. Analysts noted that the revision was made “following the sustained upside in gold prices and gold equities.” Among global large-cap miners, Newmont is still rated neutral by Goldman Sachs but has a “positive outlook on production/free cash flow/capital management.”

Margin Expansion a Key Driver for Mining Stocks' Outperformance

Goldman Sachs further emphasized that margin expansion is a key driver for mining stocks' outperformance. The firm stated, “We continue to expect this gold equity cycle to persist, supported by margin expansion, with gold equities expected to continue to outperform the commodity itself through 2025.” Goldman Sachs added that this trend has doubled the market capitalization of the Australian gold industry over the past year, from approximately AUD70 billion to AUD135 billion, while the market capitalization of global gold majors has expanded from $135 billion to $270 billion.

UBS Joins the Ranks in Adjusting Gold Price Expectations

UBS Group also joined the ranks of those adjusting gold price expectations, on Friday raising its end-2025 gold forecast by $300 to $3,800 per ounce and its mid-2026 forecast by $200 to $3,900, citing anticipated Federal Reserve easing and U.S. dollar weakness linked to rate cuts and geopolitical risks. The Swiss bank also revised its estimates for gold-backed exchange-traded fund (ETF) holdings, forecasting that they will exceed 3,900 tonnes by end-2025, approaching the previous record of 3,915 tonnes set in October 2020. UBS said in a note: “We retain an ‘attractive’ view on gold and remain long the metal in our global asset allocations. Furthermore, our analysis suggests that a mid-single-digit percentage allocation to gold is optimal.”

Factors Supporting Gold's Appeal

The bank highlighted that geopolitical concerns, policy divergence between the U.S. government and the Fed, and U.S. President Trump's preference for low interest rates are key factors boosting gold's appeal. UBS anticipates that central bank gold purchases will remain strong this year at around 900-950 tonnes, slightly below last year’s near-record level of just over 1,000 tonnes. “The key risk for gold is that the Fed is forced to hike rates on inflation-related upside surprises,” the bank added. Non-yielding bullion is often seen as a safe haven asset during times of economic and geopolitical uncertainty and performs well in a low-interest rate environment. It hit a record high of $3,674.85 on Tuesday and is up over 39% year-to-date. It was still trading near those all-time highs in European trade on Friday.

Analyzing the Future of Gold Prices

These raised forecasts from major financial institutions like Goldman Sachs and UBS point to a positive outlook for gold. However, it's important to note that these forecasts rely on several factors, including Federal Reserve policies, geopolitical risks, and the performance of the global economy. Investors should conduct their own research and consult with a financial advisor before making any investment decisions. Consider the potential impact of inflation, interest rate changes, and global events on your portfolio.