Goldman sees gold at $5,400 by year-end

Goldman Sachs maintained its bullish outlook on gold prices despite the precious metal's recent decline, predicting a recovery by the end of the year.

In a research note, the US bank forecasts gold to reach $5,400 an ounce by year-end, citing continued central bank purchases and expectations of two more US interest rate cuts this year.

The bank noted that gold still faces downside risks in the short term and could fall to $3,800 an ounce if the energy supply crisis worsens. However, the potential for an upside remains significant if a war accelerates investment diversification away from traditional Western assets.

Analysts Lena Thomas and Dan Stroeven from Goldman Sachs explained in the note that concerns about central banks selling gold to support their currencies are unlikely to materialize.