Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
Gold prices have delivered one of the strongest runs in modern market history. After surging around 65% in 2025 and repeatedly setting new all-time highs, many investors jump to the conclusion that the trade is overcrowded.
Goldman Sachs strongly disagrees.
In fact, the bank points out how the rally has reached record levels without meaningful participation from U.S. investors. The expanding gap between price action and ownership — which sustained as long as American investors sit on their hands amid rising prices — is precisely why the metal may have further to run.
Americans Remain Behind in Gold Allocation
One of the strongest pillars of gold’s years-long upward momentum has been robust official consumption. As central bank gold buying accelerates into 2026, this core source of demand is likely to continue supporting higher gold prices. Although foreign retail investors have shown interest, Americans have lagged far behind, with enthusiasm remaining low.
Despite record prices, American households and institutions have barely increased their exposure. Goldman Sachs analysts recently revealed how gold remains a microscopic allocation inside U.S. investment accounts.
As the latest report suggests, gold exchange-traded funds (ETFs), the most widely used investable gold vehicle, account for just 0.17% of U.S. private financial portfolios. Applied to roughly $112 trillion held across U.S. stocks and bonds, that equates to about $190 billion collectively allocated to gold ETFs. This figure excludes physical gold, which represents only a small portion of gold held through investable channels.
Gold’s share of U.S. private financial portfolios peaked near 0.23% in 2012, on the back of the global financial crisis. Despite gold trading at far higher prices today, allocation remains six basis points below that level. In Goldman Sachs’ view, portfolio growth over the past decade has significantly outpaced growth in gold ownership, leaving exposure unusually low relative to current price levels.
2025 ETF Flows Challenge 2020 Peaks
Despite still representing a tiny share of retail portfolios, American investors have increased their gold ETF exposure. After a strong first half of 2025 that saw roughly $38 billion in inflows, the third quarter delivered the largest quarterly inflows on record.
Global gold ETF demand reached about $26 billion during Q3, with North American investors accounting for roughly $16 billion of that total. By late 2025, global gold ETF holdings stood near 3,893 tonnes, just below the all-time high of 3,929 tonnes recorded in November 2020.
Even so, the inflow and holdings data reported so far in 2025 have not clearly surpassed the pandemic-era benchmark when measured by ETF holdings in tonnage terms.
Professional Gold Allocations Remain Modest
The same dynamic holds among professional U.S. investors. According to World Gold Council surveys, 85% of North American professionals report owning some gold, up from 69% in 2018. This headline number may seem high, but ownership doesn’t translate into meaningful exposure. Roughly one-quarter of professional investors allocate 3% or more to gold, while another quarter owns less than 1%.
Notably, these allocations remain well below what many major financial institutions recommend. While traditional guidance has often suggested allocating around 5% to gold, the metal’s growing role in the global financial system has prompted broader rethinking of the classic 60/40 portfolio framework. For instance, Bank of America recently advised investors to put as much as 40% of their portfolios in gold.
Small Reallocations Could Move Gold Sharply Higher
This sizable gap between how much gold investors own and how much they could own has direct implications for gold prices.
Goldman Sachs research indicates that every 1 basis point increase in gold’s share of U.S. portfolios could lift prices by roughly 1.4%. Used appropriately as a marginal sensitivity, the estimate highlights gold’s convexity:
- 10 bps → ~14% upside
- 25 bps → ~35%
- 50 bps → ~70%
- 100 bps → ~140%
As Goldman analyst Daan Struyven puts it, “You only need a relatively small diversification step out of global bond markets to cause significant upside for gold prices.”
Goldman’s Forecast and the Upside Risk
Against this backdrop, Goldman forecasts gold reaching $4,900/oz by December 2026. That represents roughly 12% to 14% upside from recent levels and falls in line with other bullish gold price predictions for 2026.
Importantly, the bank stresses this is a base case rather than a ceiling. The forecast assumes limited private-sector participation. Any broader shift toward gold as a portfolio diversifier could materially lift prices.