Worries US Dollar ‘May Not Be Safe’ Driving Rapid Gold Demand From Central Banks and Investors: Goldman Sachs

Daan Struyven, Goldman Sachs co-head of global commodities research, says that global economic uncertainty is raising fears of a weakening US dollar while driving higher demand for gold.

In a new interview on CNBC’s Squawk Box, Struyven says that many investors and central banks are on a gold buying spree as they look to the safe-haven asset amid US President Donald Trump’s tariff policies.

“The broader driver here is uncertainty and risks, downside risks to the US and the global economic outlook, and that is pushing down some of the more procyclical commodities closely tied to US growth, such as oil, but it’s supporting gold. We have seen very significant increases in investment demand for gold, and we’re seeing very rapid buying from central banks for gold as well.”

Struyven says gold may soar to as high as $3,300 this year amid investor fears the US dollar will weaken.

“Our forecast base case for year-end is $3,100 per ounce. But we think that the risk to this base case and to our $3,100-$3,300 range are skewed to the upside. It’s pretty remarkable. We have seen a rally despite a decline in speculative positioning. So positioning is a lot cleaner than before the rally.

And the reason is that investors, ETF (exchange-traded fund) holdings have jumped. They have added 100 tons of demand over the last month, and central bank buying continues to be very strong. In January, central bank buying was seven times higher than the pre-2022 average. Central banks across the world are worried that the dollar and Treasury holdings may not be safe.”

Gold is trading for $2,994 per ounce at time of writing.

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