Goldman Sachs has raised its outlook for both gold and oil prices, forecasting significant price increases by 2025. According to the global investment banking giant, gold prices could surge to $3,150 per ounce, marking a substantial 19% rise from current levels.
This increase is largely attributed to several global factors, including persistent inflation, rising geopolitical risks, and growing demand from central banks.
Goldman Sachs’ analysts, led by Daan Struyven, head of commodities research, emphasize that the primary drivers of this bullish forecast for gold are higher demand from global central banks and concerns over fiscal sustainability in the U.S. and ongoing trade tensions.
In a note detailing their projection, the firm maintains its December 2025 forecast of $3,000 per ounce, noting that the continued appetite for gold, particularly from central banks, is likely to add 9% to the price. Analysts believe that speculation and exchange-traded fund (ETF) flows could increase as a result of these factors, further boosting demand.
However, the forecast comes with some risks. Goldman Sachs notes that the potential for higher interest rates and a stronger U.S. dollar are the primary downside risks to their gold price prediction. If these conditions persist, they could weigh on the precious metal’s performance.
UBS, another major player in the financial sector, shares a similar outlook for gold. The bank expects prices to rise to $2,900 per ounce by the end of 2025, with an upside target of $3,000 per ounce.
UBS analysts also believe that gold prices may face a period of consolidation in the near term but anticipate modest gains by the end of the year, with a 2024 target of $2,700 per ounce.
Joni Teves, Precious Metals Strategist at UBS, explained that gold’s near-term price movement will be influenced by the macroeconomic environment and developments in U.S. policy.
Turning to the outlook for oil, Goldman Sachs has forecast Brent crude oil prices to stay within a range of $70 to $85 per barrel in 2025. This prediction is based on expectations of moderate demand and excess supply capacity globally.
However, the bank warns that in the event of a geopolitical crisis, such as disruptions in the Strait of Hormuz or escalating tensions with Iran, oil prices could spike to $100 per barrel.
Goldman Sachs expects the average price of Brent crude to rise to $76 per barrel in 2025, with a peak of $78 in June, before edging down to $73 by December.
Brent crude prices have already seen significant volatility in 2024, with prices dipping as low as $69 per barrel before reaching $91 per barrel in April, driven by geopolitical tensions.
Goldman Sachs also outlines a few downside scenarios for oil prices. In the event of widespread tariffs, such as a 10% U.S. tariff on oil imports, Brent prices could fall to $64 per barrel by the end of 2026.
Another potential downside risk is the unwinding of OPEC+ production cuts, which could lead to a drop in prices to $61 per barrel by the end of 2026.
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