Instead, the bank said, uncertainty inspired by President Donald Trump has boosted the yellow metal — but that's set to fade.
Spot gold has certainly rallied of late, climbing from levels under $1,212 an ounce in July to as high as $1,342.90 this week, touching its highest levels in around a year, according to Reuters data.
Gold, which traditionally acts as a safe-haven play when investors turn nervous, was at $1,338.50 an ounce at 9:41 a.m. HK/SIN on Wednesday.
Some of the metal's gains have coincided with increased tensions on the Korean Peninsula, including when North Korea claimed a successful hydrogen bomb test on Sunday.
Goldman, however, didn't think the gold rally was unrelated to the North Korean tensions, just that it only explained around $15 of the more than $100 rally.
"We find that the events in Washington over the past two months play a far larger role in the recent gold rally followed by a weaker dollar," it said, adding that's the reason the yellow metal likely wouldn't hold its gains.
Barring a "substantial" escalation of North Korean tensions, Goldman said it was sticking with an end-of-year gold forecast of $1,250 an ounce.