Banking giant sets gold’s price if a recession hits in 2025
By: bitcoin ethereum news|2025/05/05 20:00:08
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Goldman Sachs (NYSE: GS) has issued a bullish gold forecast, setting a price target of $3,880 per ounce by the end of 2025 if a recession materializes. The projection is based on the expectation that fears of an economic downturn would accelerate inflows into gold exchange-traded funds (ETFs), driving higher prices. In its base case scenario, the bank’s Monday, May 5 investors note sees the yellow metal climbing to $3,700 per ounce by year-end 2025 and rising further to $4,000 by mid-2026 as structural demand from central banks and investors continues to build. However, in an extreme “tail-risk” scenario, where markets begin to fear Federal Reserve subordination or potential shifts in U.S. reserve policy, the American banking giant estimates gold could trade near $4,500 per ounce by the end of next year. Goldman Sachs’ outlook comes as gold aims to reclaim the $3,500 high following its impressive 2025 run. The metal has gained 26.31% year-to-date and is trading at $3,315 as of press time. However, with gold flying high, signs of a potential sell-off have emerged. The precious metal lingers in the overbought territory, with the current relative strength index (RSI) well above the 70 threshold. Silver to lag gold While gold continues to shine, Goldman Sachs expects silver to lag. According to the lender, a slowdown in Chinese solar panel production and weaker industrial demand are factors weighing on silver’s outlook. To this end, with high recession risk and continued central bank interest in gold, the entity noted that the gold-silver price ratio is expected to remain elevated, reinforcing gold’s relative outperformance. In April, Goldman Sachs analyst Daan Struyven noted that gold is poised to continue breaking records as recession risks remain higher than widely expected. The bank also highlighted that the stock market’s sharp rebound since April leaves limited upside for risk assets, even if U.S.-China trade tensions ease. As a defensive play, Struyven recommended long positions in gold and oil puts to hedge against what he called “still elevated cyclical recession risk” in the months ahead. Featured image via Shutterstock Source: https://finbold.com/banking-giant-sets-golds-price-if-a-recession-hits-in-2025/
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