Goldman Sachs Predicts Gold Rally Boosted by Silver Options Activity

Goldman Sachs has reported a significant increase in client activity within the silver options market, which it believes could enhance the ongoing rally in gold prices. Clients are purchasing call options that speculate on silver reaching $90 per ounce in the near future. As of August 21, 2026, silver was trading at approximately $69.40 per ounce, reflecting a year-over-year increase of over 78%. This surge follows a brief period earlier in the year when silver prices approached $90.

The bank explains that the influx of money into silver call options creates a self-reinforcing cycle. Market makers who sell these options must hedge their positions by acquiring the underlying asset, which in turn drives prices higher. This momentum is expected to extend to gold, as the two precious metals typically move in correlation. Goldman Sachs has set its end-of-2026 gold price targets between $4,900 and $5,400 per ounce, while projecting silver prices to average between $85 and $100 during the same period.

Citi has echoed Goldman’s optimistic outlook, maintaining a near-term silver target of $75 and a 6-to-12-month target of $90. The bullish sentiment for precious metals is supported by ongoing central bank purchases and increased demand for gold and silver ETFs. Additionally, silver's industrial applications, particularly in solar panels and electric vehicles, contribute to its demand, while supply challenges persist due to slow mining output.

The concentration of call buying at the $90 strike price indicates strong market sentiment. A rise to $90 from the current price would represent a substantial gain. However, the smaller size of the silver market means that buying pressure can lead to more pronounced price movements, which can also result in significant volatility.

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Source: KLEA News