Investing.com – Goldman Sachs has lifted its year-end price target on gold, saying the yellow metal is currently in “an unshakeable bull market.”

hit a record high of $2,372.62 an ounce over the weekend, while June climbed to a record high of $2,389.0 an ounce. 

The biggest point of support for gold prices of late was a drone and missile strike by Iran against Israel over the weekend, in supposed retaliation for an attack on an Iranian embassy in Syria.

The move marked the potential entry of Iran into the long-running Israel-Hamas war, and presented the possibility of a greater conflict in the Middle East, which could also draw in the United States.

However, gold had already posted strong gains this year, even with sticky inflation suggesting Fed interest rates remained elevated for longer than previously expected.

“Indeed, despite the market pricing progressively fewer Fed cuts, stronger growth trends and record equity markets, gold has rallied 20% over the past two months,” analysts at the investment bank said, in a note dated April 12.

“The traditional fair value of gold would connect the usual catalysts – real rates, growth expectations and the dollar – to flows and the price. None of those traditional factors adequately explain the velocity and scale of the gold price move so far this year.”

Goldman said the majority of the gold upside since mid-2022 has been driven by new incremental (physical) factors, not least a significant acceleration in EM Central Bank accumulation as well as Asian retail buying. 

“Those factors remain well affirmed by current macro policy and geopolitics. Moreover, with Fed cuts still a likely catalyst to soften the ETF headwind later in the year, and right tail risk from the US election cycle and fiscal setting, gold’s bullish skew remains clear,” Goldman said. 

The bank has upgraded our price forecast to $2,700 a troy ounce by year-end, up from $2,300 a troy ounce previously.