Central Bank Demand and Global Uncertainty Drive Projections Toward New Heights
The “gold rush” of the mid-2020s shows no signs of slowing down. Goldman Sachs has officially raised its gold price forecast for the end of 2026 to a staggering $5,400 per ounce, up from its previous estimate of $4,900. This revision follows a year of unprecedented growth, with gold already climbing more than 11% in the first few weeks of 2026 after a massive 64% rally in 2025.
The surge is being driven by a “structural shift” in how the world views bullion, moving it from a speculative asset to a necessary hedge against a volatile global landscape.
Why the Experts are Betting on Gold
According to the latest notes from the investment bank, the bull case for gold rests on three main pillars:
- Central Bank Diversification: Emerging-market central banks are consistently moving away from the US dollar. Goldman expects these institutions to purchase an average of 60 tonnes of gold in 2026.
- Private Sector Holding: Unlike previous rallies where investors sold off during peaks, private buyers are now holding onto their gold as a shield against geopolitical instability and shifting trade policies.
- Safe-Haven Status: With ongoing fiscal sustainability concerns in major economies and a “Sell America” sentiment occasionally hitting the markets, gold remains the ultimate insurance policy.
What This Means for India: ₹1.6 Lakh and Beyond
In India, global price hikes are amplified by currency fluctuations. If gold hits the $5,400 mark internationally, domestic prices are expected to skyrocket.
- Price Targets: Analysts predict that 24K gold in India could comfortably cross ₹1.60 lakh per 10 grams by the end of the year.
- Current Snapshot: As of January 22, 2026, spot gold in India is already trading near ₹1.52 lakh per 10 grams, having hit record highs of ₹1.56 lakh just a day prior.
- Consumer Impact: While investors are cheering, high prices are beginning to weigh on the jewelry sector, with many buyers shifting toward Gold ETFs and Sovereign Gold Bonds to avoid the rising costs of physical ornaments.
The “Greenland Effect” and Market Volatility
While the long-term outlook is bullish, the journey hasn’t been without bumps. Just this week, prices saw a sharp “profit-taking” dip after President Trump softened his stance on European tariffs and the annexation of Greenland. This de-escalation briefly boosted the US dollar and cooled safe-haven demand, showing just how sensitive the metal is to the daily news cycle.
However, with other major banks like Citi, JPMorgan, and Bank of America all eyeing the $5,000+ mark, the consensus is clear: the glitter isn’t fading anytime soon.