In the face of the pullback, Goldman Sachs remains steadfast: continue to be bullish on gold in 2025, with a target of $3,000 unchanged!

Since the beginning of this year, gold has repeatedly set historical highs, but there was a pullback earlier this month, leading to the longest consecutive sell-off in months. Is the gold bull market coming to an end?

On November 17, Goldman Sachs analysts released their 2025 outlook report, stating that they remain optimistic about gold and have the most confidence in the precious metals sector. Goldman Sachs has listed going long on gold as its top trade in commodities for 2025.

The report states, "With structural support from central bank gold purchases and cyclical support from the Federal Reserve's interest rate cuts, we maintain a year-end target price of $3,000 per ounce for gold by the end of 2025."

Goldman Sachs: Pullback Provides Entry Opportunity

Goldman Sachs believes that the uncertainty of U.S. policies and the recent consolidation in the gold market provide an attractive entry point.

The report indicates that after the U.S. election results are finalized, gold prices experienced a significant pullback, with speculative buying withdrawing from historical highs, providing a 'good opportunity' to buy gold.

Goldman Sachs expects that driven by the normalization of investor and institutional demand, gold prices will rise to $3,000 per ounce by December next year, which implies a 17% upside from last Friday's closing price.

Specifically looking at the driving factors, Goldman Sachs believes that the structural driving force in gold demand comes from central bank demand, while the cyclical driving force comes from the Federal Reserve's interest rate cuts, with the main downside risks stemming from rising interest rates and a strengthening dollar.

To hedge against financial market uncertainties and the sustainability risks of U.S. Treasury bonds, central bank demand for gold has increased fivefold since the escalation of the Russia-Ukraine conflict in 2022.

As the Federal Reserve began its interest rate cut cycle in the third quarter, the gold holdings of ETFs have gradually increased.

We believe that as speculative demand gradually normalizes, the support from the aforementioned factors will offset and exceed the resistance brought by speculative buying.

Additionally, Goldman Sachs has hypothesized the movement of gold under two tail scenarios.

One is that in the event of unprecedented escalation in trade tensions, driving speculative buying to rebound, gold prices could rise up to 7% above the bank's bullish path.

The second is that in the event of heightened concerns over the sustainability of U.S. fiscal policy, gold prices are expected to rise an additional 5% by the end of next year, reaching $3,150.

The report explains that this is mainly because as concerns over inflation and fiscal risks intensify, demand from speculative positions and ETFs will increase, and worries about the sustainability of U.S. debt may also prompt central banks around the world to purchase more gold