Synopsis:

Gold has surged to new highs amid persistent overnight buying from Asia, with volumes well above average. Goldman Sachs highlights that despite the rally, positioning is not yet stretched. Their bullish year-end forecast now stands at $3,700/oz, with a $4,500/oz tail-risk scenario under potential Fed policy shifts.

Key Points:

• Asian Buying Momentum:
  Spot gold broke Monday’s highs, marking eight consecutive overnight rallies driven by strong Asia session demand.

• Elevated Volumes:
  Trading volumes are currently running ~40% above the 10-session average at this time of day.

• Positioning Still Roomy:
  CFTC, ETF, and open interest data indicate speculative positioning is not yet extended, suggesting room for further upside.

• Goldman’s Upgraded Outlook:
  GS recently raised their 2025 year-end forecast to $3,700/oz, citing:

  • Increased ETF inflows

  • Continued central bank buying

  • Elevated geopolitical and macro uncertainty

• Tail Scenario:
  If the Fed is forced to subordinate policy due to debt concerns or US reserve currency shifts, GS sees gold potentially spiking to $4,500/oz.

Conclusion:

Goldman views the current rally as sustainable, with strong physical demand and investor inflows from Asia underpinning the move. Positioning remains far from euphoric, supporting their constructive outlook, while macro risks could trigger a super-spike scenario in the months ahead.