Goldman Sachs sees gold at $3,150 per ounce, oil at $100 a barrel in 2025

Goldman Sachs expects gold prices to reach $3,150 per ounce (in their bullish case scenario) by December 2025, an upside of around 19 per cent from the current levels as they remain a good hedge against sticky inflation and rising geopolitical issues.

 

A large part of this price rise, they believe, will also be fueled by higher demand from global central banks coupled with concerns over US fiscal sustainability and trade tensions/wars.

 

“We keep our $3,000 December 2025 forecast. The structural driver of our bullish gold forecast is higher demand from central banks (adding 9 per cent to the gold price by December 2025 relative to our November $2,640 forecast)," wrote analysts at Goldman Sachs led by Daan Struyven, their head of commodities research in a recent note.

 

 

Rising fears of inflation and fiscal risks, Goldman Sachs said, could drive speculative positioning and exchange traded flows (ETF) flows higher, while US debt sustainability concerns may push central banks, especially those holding large US Treasury reserves, to buy more gold.

 

“While the boost from central bank demand has outweighed the drag from high interest rates in late 2022-early 2023, we see potentially higher interest rates and a stronger dollar as the main downside risk to our bullish gold forecast,” Struyven said. 

 

Those at UBS, too, expect the gold prices to continue their journey north and hit $2,900 per ounce by December 2025 (earlier: $2885/oz) in their base case. On the upside, they expect the yellow metal to hit the $3,000 an ounce mark by December 2025-end.

 

In the near term, however, they believe there is scope for gold prices to consolidate, albeit with an upside bias to end the year modestly higher than current spot levels, with their end-2024 target at $2700.

 

“This would correspond with markets contemplating the macro outlook for the year ahead as we slowly get more insights on what US policies are probably going to look like,” wrote Joni Teves, Precious Metals Strategist, UBS Investment Bank.

 

Crude oil price outlook 2025

 

Brent crude oil prices, Goldman Sachs forecasts, are likely to remain in a range of $70-85 range in the year ahead amid tepid demand and excess supply capacity across the globe. In a worst-case scenario where geopolitics takes center stage and disrupts supply, Strait of Hormuz closes, and the new US administration further raises the risks to Iran supply, Goldman Sachs expects the Brent crude oil prices to climb to $100 a barrel.

 

Thus far in calendar year 2024 (CY24), Brent crude oil prices hit a low of around $69 a barrel before breaching the $91 a barrel mark in April 2024 as geopolitical concerns rose. 

 

“We still forecast Brent to rise to an average of $76/bbl in 2025 with a $78 peak in June, after which it edges down to $73 by December 2025. Our modest 0.4 million barrels per day (mb/d) 2025 surplus reflects our base case that solid supply growth from the Americas and OPEC+ supply increases in Q1-2025 outpace resilient 1.2mb/d demand growth. Introducing our 2026 balance, we forecast Brent to edge down to $71/bbl on a moderate surplus,” Struyven said.

 

On the other hand, in a scenario where the US imposes an across-the-board tariff of 10 per cent, they estimate Brent prices to drop to $64/bbl by end-2026 as broad tariffs reduce global gross domestic product (GDP) and oil demand by 1 per cent.

 

“In a second downside scenario where OPEC+ unwinds its production cuts through 2025 (vs. our base case of Q1-2025), we estimate that Brent drops to $61 by end-2026,” Goldman Sachs said.