Gold’s performance in 2025 has become one of the most closely tracked stories in global markets, and a recent survey by Goldman Sachs has added a new layer of insight into why many institutional investors expect the precious metal to surge toward $5,000 per ounce next year. The findings reveal a broad shift in market psychology, driven by macroeconomic instability, aggressive central-bank accumulation, and deep-rooted concerns over fiscal sustainability in major economies. Gold’s rise is no longer viewed as a simple reaction to inflation or geopolitical fear; instead, investors increasingly see it as a structural transformation in the global financial system.

Why Goldman Sachs Turned to Institutional Investors

Goldman Sachs’ decision to poll institutional investors reflects a recognition that traditional market drivers are evolving. Over the past two years, gold has no longer behaved merely as a safe-haven asset that spikes intermittently during crises. Instead, it has demonstrated a sustained upward trajectory that mirrors broader shifts in global capital allocation. For institutional investors — hedge funds, pension funds, sovereign wealth vehicles, large asset managers — gold has re-emerged as a long-term strategic asset rather than a tactical hedge.

Goldman’s survey included more than 900 investors using its institutional Marquee platform. By capturing expectations from this segment, the bank was able to map how large pools of global capital perceive the next phase of gold’s cycle. The results indicate that the majority view the metal as being at the start of an extended multi-year uptrend, not the end of one.

A striking share of respondents expect gold prices to exceed the symbolic $5,000 threshold within the next year. This reflects not just optimism in price momentum but deep concerns about the fragility of the global economy and the limits of traditional monetary policy.

Gold’s Momentum and the Push Toward New Highs

Gold has already delivered one of its strongest performances in modern history. Prices have risen far more rapidly than expected, hitting levels that previously would have been associated only with severe global dislocation. Yet the current rally has been driven by interconnected structural factors rather than panic buying.

Among the most significant is the persistent decline in real interest rates across advanced economies. Even with high nominal policy rates, inflation across multiple regions has kept real yields compressed, reducing the opportunity cost of holding gold. This environment is particularly supportive for institutional investors seeking long-duration, non-yielding assets that preserve value during prolonged periods of monetary transition.

The Federal Reserve’s evolving stance toward rate cuts has also become a primary catalyst. Each signal of easing — even subtle — reinforces the view that gold’s current highs are not peaks but stepping stones. The metal’s price movements in recent months have shown sensitivity not just to actual decisions but to forward guidance, reflecting how deeply gold has become tied to expectations around policy cycles.

Why Institutional Investors Expect $5,000

The expectations captured in the Goldman Sachs survey reveal that investors see gold’s trajectory as fundamentally tied to the underlying conditions shaping global markets.

The single most important driver identified is central-bank buying. Over the last several years, central banks have been accumulating gold at the fastest pace in half a century. This reflects a global shift toward diversifying reserves away from currencies — particularly the U.S. dollar — and toward assets with no counterparty risk. For institutional investors, central-bank behavior has historically been a powerful leading indicator. When central banks accumulate aggressively, they often absorb enough supply to set the stage for multi-year price cycles.

Another significant driver cited in the survey is concern around fiscal sustainability. Large deficits in advanced economies, rising government borrowing, and the expectation of monetization in the medium term have reinforced gold’s role as a hedge against sovereign risk. Investors point to the expanding debt burdens of the United States, parts of Europe, and several major emerging economies as catalysts for long-term gold appreciation. Gold’s role as a neutral reserve asset becomes increasingly valuable in an environment where traditional fiscal anchors weaken.

Institutional strategies also reflect growing skepticism about equity valuations, particularly in markets where performance has been concentrated in a narrow group of technology firms. Many investors want exposure to real assets as a counterbalance to the financialized growth that has defined recent market cycles. Gold, with its deep liquidity and historical resilience, fits this need more reliably than other commodities.

The Expanding Role of Central Banks and Global Reserve Shifts

Central-bank accumulation has fundamentally altered the structure of the gold market. Historically, central banks were net sellers or passive holders. Today they are aggressively buying, reshaping both liquidity dynamics and long-term pricing trends.

Several factors explain this development:

• A desire to reduce exposure to the dollar during geopolitical tensions
• Growing concerns about sanctions risk for reserve assets
• A push toward greater monetary sovereignty among emerging markets
• The recognition that gold provides stability during currency-market volatility

Many central banks — particularly in Asia, the Middle East, and parts of Latin America — have expanded their gold reserves for the first time in decades. Their purchases remove large volumes of metal from circulation, limiting supply available to investors and reinforcing price strength. Institutional investors closely track this trend and often calibrate their strategies to move in alignment with sovereign demand.

This has created a feedback loop: as central banks buy more, institutional investors interpret it as validation of gold’s increasing importance in the global financial system, prompting them to allocate further capital into gold-related instruments.

Geopolitical Fragmentation and the Rise of Safe-Haven Demand

The current geopolitical climate is another underpinning of investor expectations. Conflicts across regions, shifting alliances, trade barriers, and economic fragmentation have all contributed to a world with higher long-term risk. Gold traditionally thrives in such environments, but what is different now is that geopolitical instability is no longer episodic — it is structural.

Investors are increasingly betting that this backdrop will persist. Safe-haven demand, once a temporary force, now appears to be a sustained phenomenon. Hedging strategies that previously involved small allocations to gold are being expanded into more substantial positions, particularly for funds managing multi-asset portfolios.

Institutional Strategies Moving Beyond Traditional Gold Exposure

The major institutions surveyed by Goldman Sachs are not merely buying physical gold. Their strategies increasingly involve:

• Allocations to gold miners, particularly firms with solid balance sheets
• Exposure to exploration-driven companies with takeover potential
• Use of long-duration futures contracts anticipating extended rallies
• Integration of gold into long-term strategic asset mixes

High-profile investors and fund managers have begun positioning in mining equities as well, anticipating that rising gold prices will lift margins, unlock merger-and-acquisition activity, and create outsized equity returns relative to spot prices.

Gold’s strengthening industrial and investment narrative has therefore converged into a single theme: the metal is becoming central to portfolio construction rather than a peripheral adornment.

(Adapted from CNBC.com)