Goldman’s base case projects gold at $3,700 per ounce by year-end and $4,000 by mid-2026

Gold prices are expected to rally sharply as escalating geopolitical tensions in the Middle East—triggered by a reported US airstrike on Iranian nuclear facilities—fuel a global flight to safety. Analysts are now projecting gold to trade between $3,500 and $3,700 as investors hedge against both geopolitical instability and inflationary risks.

On Friday, gold initially dipped on expectations that President Trump might pursue diplomatic efforts. However, prices fully recovered by the close in New York, reflecting a swift market reassessment of the likelihood of US military involvement. A long lower shadow on the day’s chart suggested traders had partially priced in a weekend escalation.

Akshay Chinchalkar of Axis Securities noted, “As long as spot gold stays above $3,314, we anticipate an upside target of $3,770, with interim resistance in the $3,450–$3,520 range. Options skew across one-week to three-month tenors is tilting bullish, indicating strong upside positioning.”

Silver, meanwhile, is seen targeting $40, with downside support at $33.68. “Given the positive 60-day rolling correlation between gold and silver over the past decade, we expect silver to benefit from gold’s rally, though likely at a slower pace,” Chinchalkar added.

In 2025 so far, gold has gained over 25 percent, while silver has risen more than 24 percent—highlighting growing investor appetite for precious metals amid rising uncertainty.

"Gold remains the second-largest reserve currency globally, anchoring over $21 trillion in safe-haven assets. In the current environment, gold is set to soar," said a market expert. While gold benefits from its haven appeal, silver—60 percent of whose demand is tied to industrial and renewable sectors—may lag. Analysts warn that a deepening conflict could spur recessionary fears, putting medium-term pressure on silver.

In a recent note, Goldman Sachs reiterated its structurally bullish view on gold, citing robust central bank demand as a key factor lifting the gold-silver price ratio. The bank does not expect silver to match gold’s pace and sees gold outperforming.

Goldman’s base case projects gold at $3,700 per ounce by year-end and $4,000 by mid-2026. In a recession scenario, accelerating ETF inflows could push gold to $3,880 by the end of 2025. Under extreme risk conditions—such as concerns over Federal Reserve independence or shifts in US reserve policy—prices could surge to $4,500.

Courtesy: Money Control