Gold traded around $4,290 on Wednesday after the September flash PMI sent Treasury yields to their highest levels since 2007. The 10-year Treasury yield climbed as high as about 5.058%, its highest level since July 2007. Yet on the same day, Goldman Sachs reaffirmed its call for gold at $4,900 by year-end 2026, citing sovereign demand that it believes is far larger than official data shows.
Goldman’s model estimates the People’s Bank of China’s July purchases at 35 tonnes, well above the amount officially disclosed. Official reserve data can understate what central banks are buying, so the bank’s nowcast model also attempts to track gold moving through London’s over-the-counter market into domestic vaults and third-party custodians. That discrepancy matters because it suggests the sovereign floor under gold could be more durable than publicly available numbers imply.
Central banks bought about 289 tonnes of gold in the second quarter of 2026, a 62% jump from a year earlier, and they bought it while the price was falling. The entry of sovereign buyers who are structurally indifferent to price can create a floor dynamic that is relatively new in the modern gold market.
The Opportunity Cost Problem Is Real
None of that changes the arithmetic for individual investors. At a roughly 5.058% 10-year yield, an investor holding $1 million in gold forgoes about $50,580 a year in Treasury income. That is not a trivial number. Central banks operate under a completely different mandate than a retiree managing a portfolio, and conflating the two is a mistake investors often make when sovereign buying headlines dominate.
The better question is not whether Goldman is right about $4,900. It may well be. The better question is how much gold belongs in a disciplined long-term portfolio after a 25% gain since the start of 2025, with a competing yield above 5% now available in risk-free Treasuries.
Building a Rational Position
Most serious allocation frameworks converge on a range of 5% to 10% for a moderate investor. That allocation provides meaningful diversification benefits without excessive concentration in non-yielding assets. Investors already at or above that range who are tempted to chase Goldman’s target should be honest about what they are doing: momentum positioning, not strategic allocation.
For those underweight gold, the current pullback toward $4,290 presents a more rational entry than prices offered earlier in the year. Goldman sees net upside risk to its $4,900 forecast, assuming continued strong central bank demand alongside a recovery in private investor ETF demand as the Fed remains on hold.
Investors who want gold exposure without storing physical metal have several options worth considering. GLD remains the most liquid ETF for direct price exposure. For those willing to accept operational risk in exchange for leverage and income, Agnico Eagle is widely viewed as a high-quality senior producer, with major operations concentrated in Canada, plus additional operations in Australia and Finland. Newmont offers comparable scale with a different cost and production profile. Claims based on third-party estimate services can change frequently, so focus less on any single percentage forecast for next year’s earnings and more on the drivers: costs, grades, jurisdictional risk, and capital discipline.
The Risk Goldman Is Not Selling
Goldman does not see the path to $4,900 as straightforward. Gold faces short-term pressure from hawkish Federal Reserve pricing, with some market participants discussing possible rate hikes. A 5% Treasury yield is the most expensive competition gold has faced in nearly two decades, and the September PMI reading suggests the Fed is not done.
The structural case for gold, driven by reserve diversification and de-dollarization, remains intact. But a position sized appropriately at 5% to 10% of a portfolio captures that case without betting the household on Goldman’s year-end number. That discipline, holding a real asset in proportion rather than in reaction to headlines, is what separates long-term wealth building from short-term excitement.
