Gold’s spectacular rally may have temporarily slowed, but the broader bullish trend is still intact, according to Goldman Sachs. The recent decline in momentum should be viewed as a period of consolidation rather than the end of gold’s long-running upward journey, says Tony Kim, Global Head of Metals Trading at Goldman Sachs.
According to Kim, uncertainty in global financial markets could continue to create short-term volatility. However, once the current concerns begin to clear, gold could potentially return to record-breaking levels.
Gold’s Recent Weakness Is an ‘Extended Pause’
Gold prices have faced pressure recently as US Treasury yields and the dollar moved higher. Stronger-than-expected US employment data released on September 4 also increased expectations surrounding the Federal Reserve’s upcoming interest-rate decision on September 16.
Higher interest rates and rising bond yields can create challenges for gold because the precious metal does not generate interest or regular income. A stronger US dollar can also make gold more expensive for buyers using other currencies, potentially affecting demand.
Despite these pressures, Kim does not believe the recent weakness signals the end of the gold bull market.
Instead, he described the current phase as an “elongated pause”, suggesting that the market may simply be taking a break after its powerful rally.
Federal Reserve Policy and US-Iran Conflict Add Uncertainty
Two major factors are currently making the outlook for gold more complicated.
The first is uncertainty surrounding the direction of the US Federal Reserve under its new chairman, Kevin Warsh. Investors are closely watching how the central bank’s leadership may approach inflation, interest rates and future monetary policy.
The second major concern is the ongoing US-Iran conflict and its possible impact on global energy markets.
Rising geopolitical tensions and concerns about energy supplies can increase uncertainty across global markets. Such conditions have historically supported demand for safe-haven assets such as gold.
Kim believes the yellow metal could regain momentum and potentially reach fresh highs once these uncertainties become clearer.
Goldman Sachs Says Investors Can Build Gold Positions Gradually
Goldman Sachs remains optimistic about the long-term outlook for the precious metal.
“We’re still bullish gold,” Kim said, adding that $4,000 could act as a strong support level for prices.
Rather than attempting to predict the exact lowest point in the market, Kim suggested that investors interested in gold could consider entering gradually.
He advised investors to use periods of volatility before the Federal Open Market Committee meeting as opportunities to slowly build positions, particularly if prices move closer to the $4,000 level.
This strategy of gradually entering the market can help investors avoid the risk of investing all their money at a single price point during uncertain market conditions.
Central Bank Buying Is Driving the Long-Term Bullish Case
One of the strongest reasons behind Goldman Sachs’ positive view on gold is the sharp increase in purchases by central banks worldwide.
According to Kim, global gold mines produce approximately 3,500 tonnes of gold annually.
Before the Russia-Ukraine war, central banks typically purchased between 400 and 500 tonnes each year. That figure has now increased dramatically, with central-bank purchases estimated at around 1,000 to 1,100 tonnes annually.
Data from the World Gold Council highlights the scale of this shift. Central banks purchased 863 tonnes of gold in 2025, significantly higher than the average annual purchase of 473 tonnes between 2010 and 2021.
During the first half of 2026, estimated net demand from central banks reached 345 tonnes.
Less Gold Is Available for Other Buyers
The increase in central-bank buying is having an important effect on the global gold market.
When a significant portion of annual mine production is purchased by central banks, less physical gold remains available for other sources of demand, including jewellery buyers, exchange-traded funds, investors and those purchasing physical bars and coins.
This reduction in available supply means that gold prices may not require an enormous wave of new investment money to move significantly higher.
With a smaller amount of gold available in the open market, even a moderate increase in investment demand could have a stronger impact on prices.
Asian Gold Demand Faces Temporary Pressure
While central-bank buying remains strong, gold demand in parts of Asia has weakened temporarily.
Higher energy costs and pressure on currencies have forced some countries, including India, to place greater emphasis on energy security. This has affected demand for gold in the region.
However, this slowdown is currently seen as one of several short-term factors influencing the market rather than a major change in the longer-term outlook.
What Could Happen to Gold Prices Next?
The next major triggers for gold could come from upcoming US inflation data and the Federal Reserve’s September policy meeting.
A stronger-than-expected Consumer Price Index (CPI) reading could put additional pressure on gold if investors expect tighter monetary policy or higher interest rates.
On the other hand, softer inflation figures could strengthen expectations for easier monetary policy, which may provide fresh support to gold prices.
For now, Goldman Sachs continues to maintain a bullish view on the yellow metal. Although rising Treasury yields, a stronger dollar and geopolitical uncertainty may cause short-term volatility, strong central-bank buying remains a key pillar supporting the long-term gold bull market.
As markets wait for greater clarity on US monetary policy and global geopolitical developments, gold may continue to experience fluctuations—but according to Goldman Sachs, the broader rally may be far from finished.