Goldman maintains view that gold will reach $5,400 per ounce by end‑2026

March 31 (Reuters) - Goldman Sachs repeated its forecast of gold reaching $5,400 per troy ounce by the end of 2026, citing central banks buying more gold, investors returning to the market and expected interest‑rate cuts in the United States.

"Our U.S. economists continue to expect two Fed cuts in 2026, which we estimate would add around $120 per troy ounce to gold prices," Goldman analysts said in a note dated Monday.

Spot gold XAU= is set to record its steepest monthly drop in 17 years, down about 13% so far this month as investors have favoured the dollar as the safer haven during the Middle East war, with markets pricing in a hawkish policy response.

Prices were trading around $4,500 on Tuesday, roughly 19% below record highs reached on January 29. GOL/

The bank noted that an energy supply shock with upside risks to inflation has led markets to expect no U.S. rate cuts this year and under that scenario, gold's fair value is seen around $4,550 per troy ounce, assuming earlier macro policy hedges remain in place.

Goldman analysts warned that a prolonged disruption to the Strait of Hormuz and an equity market correction could drag prices as low as $3,800 an ounce, although they see this outcome as unlikely.

They said recent events are unlikely to curb buying by emerging‑market central banks, which remain structurally underweight gold and are expected to stay resilient once volatility eases.

Over the medium term, Goldman sees significant upside risk to its forecast, with geopolitical shocks and rising concerns over long‑term Western fiscal sustainability potentially driving renewed demand for macro hedges, and lifting prices to $5,700 per ounce, with further hedge accumulation pushing gold toward $6,100.

The war with Iran has persisted for a month with no clear end in sight, as President Donald Trump warned the U.S. would obliterate Iran's energy plants and oil wells if it does not open the Strait.