Goldman Sachs Raises Year-End Forecast to $4,900
The international gold price has once again reached an all-time high. Analysts attribute this to increased demand for gold, a representative safe-haven asset, as financial market uncertainty grows due to the U.S. federal government shutdown and the political crisis in France.
According to Reuters, the spot gold price on October 7 at one point hit a record high of $3,977.19 per troy ounce (31.1034768g). As of 04:46 UTC on October 7, the price stood at $3,974.09, up 0.4% from the previous day.
The price of U.S. gold futures for December delivery rose 0.5% to $3,996.40.
Since the beginning of this year, the gold price has repeatedly broken record highs and has risen by 51%.
Goldman Sachs Group, which has been forecasting strong gold prices, recently raised its December 2026 gold price outlook from $4,300 to $4,900.
The spot silver price remained stable at $48.52, while platinum rose 0.1% to $1,626.55, and palladium increased 0.9% to $1,330.91.
Kelvin Wong, senior market analyst at the online trading brokerage OANDA, explained, "The market probability for rate cuts in October and December still exceeds 80%, which is supporting gold prices. The current U.S. federal government shutdown is also a factor."
The factors driving the rise in gold prices include: heightened economic and geopolitical uncertainty and surging demand for safe-haven assets following the shock brought to the market by U.S. President Donald Trump; the Federal Reserve's interest rate cuts and expectations for further reductions; and central banks in various countries diversifying their portfolios by purchasing non-dollar assets.
Bloomberg reported that, as the U.S. federal government shutdown enters its second week, key data that would allow investors to gauge the state of the U.S. economy is not being released to the public, making it difficult for the Federal Reserve to assess changing conditions.
Traders expect the Federal Reserve to cut rates by 0.25 percentage points in October and have priced this in, while another rate cut of the same magnitude is seen as highly likely in December.
In France, which has the largest fiscal deficit in the eurozone, uncertainty has intensified as Prime Minister Sebastien Lecornu, less than a month into his term, failed to reach a budget agreement with political parties and resigned.
Additionally, the near-certain appointment of Sanae Takaichi, the new president of Japan's Liberal Democratic Party, as the next prime minister of Japan has also shaken financial markets.
Nicky Shiels, head of metals strategy and research at MKS PAMP SA, a precious metals refining and trading services company based in Geneva, Switzerland, stated in a report, "Political changes in France and Japan are fueling financial concerns and contributing to the 'gold rally.' The recent rise in gold prices is being driven by inflows from both retail (especially in Europe and Japan) and institutional investors."
Ahmad Ashiri, a strategist at Australia's online trading brokerage Pepperstone Group, said, "This demonstrates the increasingly strategic importance of gold as a structural component within a diversified portfolio," adding, "With concerns about an overheated securities market growing, gold is occupying the best position as a safe haven."
If these price levels are maintained, Bloomberg reported that the annual increase in gold prices in 2025 is expected to be the largest since 1979.
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