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old prices have been consistently breaking records this year, driven by changes in ownership rather than traditional supply and demand dynamics. Unlike commodities like oil or gas, gold isn't consumed but accumulated and stored in vaults, reserves, and jewelry.

    According to Goldman Sachs analysts, the price of gold moves more like prime Manhattan real estate, where conviction buyers set the trend. These buyers, such as central banks, ETFs, and speculators, purchase gold regardless of price, while opportunistic buyers, like households in emerging markets, step in only when the price is right.

    The total amount of gold ever mined still exists, mostly locked away, with new annual production adding just over 1% to the existing stock. This means that gold's market clears through changes in ownership rather than production-versus-use balances.

    Goldman identifies two groups of buyers: conviction buyers and opportunistic buyers. Conviction buyers set the trend, while opportunistic buyers provide a floor under prices during sell-offs. The analysts find that conviction flows explain about 70% of gold price's month-to-month moves, with every 100 tons of net buying by conviction buyers pushing prices up by about 1.7%.

    Goldman Sachs forecasts spot prices will reach $3,700 per ounce by the end of 2025 and $4,000 per ounce by mid-2026.