Gold prices have had a rough few months, dropping more than 6% year to date after hitting record highs in late January. But if you think the gold rally is dead, Goldman Sachs would like a word. The investment bank just doubled down on its bullish gold forecast, and it's a doozy.

In a note released Sunday, Goldman's co-head of global commodities research, Samantha Dart, made it clear: "Gold is not done." The bank sees bullion climbing to $4,900 per troy ounce by the end of 2026. That's about $900 above current levels, which means we're talking about a potential gain of over 22% from here. Not bad for an asset that's been in the doghouse lately.

Gold has stumbled as markets priced in a more hawkish Federal Reserve, with sticky inflation and a resilient labor market keeping rate cuts at bay. Higher Treasury yields make gold less attractive since the metal doesn't pay interest. But Goldman argues the pullback is temporary, and the structural drivers that pushed gold to all-time highs are still very much alive.

Gold ETFs to Watch

If Goldman is right, gold-backed ETFs could see a resurgence in inflows. Here are the big ones to keep an eye on:

SPDR Gold Shares (GLD) is the 800-pound gorilla of the gold ETF world. With over $60 billion in assets, it's the go-to for institutional investors who want liquid, direct exposure to physical gold. The expense ratio is 0.4%, which is reasonable for a fund of its size.

iShares Gold Trust (IAU) is a popular alternative, tracking spot gold prices with a lower expense ratio of 0.25%. It's a favorite among long-term investors who want to keep costs down.

For the truly cost-conscious, SPDR Gold MiniShares Trust (GLDM) offers the same exposure at just 0.1% expense ratio. And abrdn Physical Gold Shares ETF (SGOL) is another physically backed option with a 0.17% expense ratio.

These ETFs tend to see stronger inflows when economic uncertainty is high, geopolitical tensions flare up, or real interest rates are expected to fall. All of which could be on the horizon.

Central Banks Are Still Buying

Goldman's biggest reason for optimism? Central banks, especially in emerging markets, are still loading up on gold. The trend started after the 2022 freezing of Russia's foreign exchange reserves, which made many countries rethink their dollar-heavy reserves.

According to a recent World Gold Council survey, a record 45% of the 76 central banks surveyed between February and May expect to increase their gold holdings over the next 12 months. That's a lot of official-sector buying, and it's helped keep a floor under gold prices even as ETF demand has softened.

Goldman sees this as the primary long-term catalyst. Reserve diversification isn't a fad; it's a structural shift that could support gold for years.

The Rate Headwind Won't Last Forever

The near-term challenge is the interest rate outlook. Gold doesn't generate income, so when Treasury yields rise, it becomes less attractive. Investors have been piling into yield-bearing assets as the Fed signals it could keep rates higher for longer, or even hike again.

Goldman acknowledges this, noting that "a hawkish Fed helps fade the debasement theme." But the bank expects those pressures to ease. Its economists predict the Fed will hold rates steady this year and start cutting in the second half of 2027. That shift could be the catalyst that brings investors back to gold ETFs.

The Big Picture

Gold has had a rough 2026 so far, but Goldman sees this as a pause, not a reversal. The bank points to concerns over Western fiscal sustainability, continued central bank buying, and an eventual recovery in ETF demand as reasons to stay bullish.

For ETF investors, the message is clear: the recent weakness might be a buying opportunity. If monetary policy becomes more accommodative next year, gold could regain its luster. And with Goldman calling for $4,900, the upside is hard to ignore.