Goldman Sachs: Gold price target for next year has room for further upside – ETF inflows will be the main driver

Even as gold prices repeatedly hit new highs, U.S. private investors’ gold holdings have barely budged — a conclusion drawn from a Goldman Sachs analysis report released Wednesday.

 

Gold’s relentless rally has dominated headlines this year, yet American investors have hardly increased their exposure at all. According to Goldman Sachs’ latest view, this means gold prices still have substantial room to rise.

 

The report shows that since gold ETFs were introduced in the mid-2000s, U.S. private investors’ allocation to gold ETFs remains 6 basis points below the 2012 peak. As of Q2 this year, gold ETFs accounted for only 0.17% of U.S. household financial portfolios — a tiny sliver of the roughly $112 trillion in stocks and bonds held by American households.

 

Goldman analysts wrote that the reason U.S. investors hold so little gold is simple: “Over the past decade, portfolio growth has outpaced growth in gold prices and trading volume and price.”

 

Despite gold reaching all-time highs in 2025, Goldman’s analysis shows the rally has not translated into any meaningful increase in actual U.S. ownership.

More buying is still to come

Goldman data shows that among large U.S. institutions managing over $1 billion, fewer than half hold any gold ETF exposure at all. Those that do typically allocate only 0.1%–0.5%.

 

For major long-term investors, gold represents roughly 0.2% of portfolios on average.

 

Moreover, physical gold demand in the U.S. is negligible compared with ETF inflows. Year-to-date physical demand has been only 110–150 tonnes, versus roughly 4,000 tonnes of net ETF buying.

 

Clearly, the low ownership highlighted in Goldman’s report contrasts sharply with recommendations from major authorities.

 

Citigroup, UBS, Morgan Stanley, BlackRock, and Bridgewater founder Ray Dalio have all advised including gold in portfolios. The gap between those recommendations and reality is exactly what Goldman believes could drive gold prices significantly higher.

Further upside ahead

The bank estimates that every 1 basis point (0.01 percentage point) increase in gold’s weighting in U.S. financial portfolios lifts the gold price by about 1.4%.

 

Goldman believes that if households or institutions meaningfully increase gold holdings for risk-diversification purposes — especially amid global macro uncertainty and fiscal concerns — these inflows could “substantially push up” prices in the relatively small gold market.

 

The bank forecasts gold reaching $4,900 by the end of 2026, but adds there is “significant upside risk” to that target if private-sector buying exceeds the central-bank demand that has dominated in recent years.

 

In late October, spot gold briefly hit a record $4,400 per ounce before pulling back to around $4,220. Year-to-date, gold is up 60%.