Despite a notable pullback in gold prices, analysts at Goldman Sachs remain optimistic about the bullion market’s trajectory. The bank sees the forces driving the broad rally becoming increasingly entrenched, yet it is worth noting they’re getting as equally political.

The bank recently reaffirmed its forecast for gold to hit $5,400 per ounce by the end of 2026, even as investors and traders navigate temporary volatility driven by liquidation and profit-taking.

Yet, Goldman believes those moments are technical and liquidity-driven, rather than signs of weakening structural demand.

“Strong underlying interest in gold remains evident,” Goldman said in a recent note, pointing to both central bank surveys and intensifying geopolitical uncertainty. The bank acknowledged that its earlier estimates had underestimated sovereign buying activity after gaps emerged in official U.K. trade data from 2025 onward.

Goldman now sees the central bank purchase projections at around 50 tons per month on a rolling basis, nearly double its previous estimate of 29 tons. The pace is expected to accelerate further, averaging about 60 tons per month through 2026 as governments continue to diversify their reserves away from the U.S. dollar.

It is a part of a broader trend, one that has arguably started with sanctions and asset freezes following the Russian invasion of Ukraine in 2022. When the precious metal cycle emerged in late 2024, a broader global shift toward resource nationalism and de-dollarization became evident.

Across emerging markets, governments are increasingly treating commodities such as gold not merely as exports or financial assets, but as strategic tools tied to sovereignty, fiscal security, and geopolitical leverage.

Policymakers on the Move

The shift is notably visible in Africa and Asia, where important policymakers have adopted sharply different – yet equally interventionist approaches to gold.

Ghana’s authorities have opted for an aggressive approach to extract more state revenue from rising bullion prices. Africa’s largest gold producer is moving from a flat 5% royalty system to a sliding-scale regime that charges up to 12% when the price exceeds $4,500 per ounce.

According to Reuters, the move has sparked rare coordinated opposition from the United States, China, and major mining companies, all of whom warned about the risks of future investments. Yet Ghanaian officials appear determined to proceed.

“They met us, they are not against the review in principle,” said Isaac Tandoh, chief executive of Ghana’s Minerals Commission, referring to diplomatic discussions with foreign governments. Ghana rejected proposals to delay the top royalty tier until gold reached $5,000 per ounce.

Mining executives remain deeply concerned. Kenneth Ashigbey, head of the Ghana Chamber of Mines, warned the higher royalty burden would “dry up new projects and output.”

India, meanwhile, is confronting the opposite problem.

Rather than trying to maximize revenue from gold production, Prime Minister Narendra Modi is attempting to suppress domestic gold demand altogether. As a prolonged Middle East conflict drives oil toward $100 per barrel and strains India’s external finances, Modi has urged citizens to buy less gold, reduce foreign travel, and conserve fuel.

The government has already raised import duties on gold and silver to 15% as part of a broader effort to slow dollar outflows and defend the rupee.

“There is less appetite for further rupee depreciation, and the burden of adjustment may be incrementally shared with consumers,” Nomura’s analysts Aurodeep Nandi and Sonal Varma noted per BBC.

While Ghana seeks to capture more value directly from its mineral wealth, India is using patriotic austerity to curb consumer demand and stabilize its balance of payments.

Still, these two examples, although different sides of a coin, show the yellow metal’s importance. Its role is expanding from a store of value to yet another tool for policymakers.

Price Watch: SPDR Gold Shares (NYSE:GLD) is up 3.32% year-to-date.

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