The parable of the sheep and the goats seems to me to be about Israel returning from exile, which happened in and through the ministry of our Blessed Lord. The parable begins with Daniel’s Son of Man coming in His glory to assume dominion of the kingdom. He gathers all the nations before Him and He makes a great separation, as He does in the other parables. This time, the separation is pictured in terms of a shepherd separating the sheep from the goats. As in the other parables, this separation subverts the expected categories: those who thought they were faithfully serving the king receive only curses and are cast into exile with the devil, while those who were faithful to Jesus’ and His people are rewarded.
Following the proposal laid out by N.T. Wright in his book Jesus and the Victory of God, I would suggest that Jesus believed all this was happening in and through His ministry for the very generation He was addressing. The judgment on unbelieving Judaism to which this parable, like the others, so clearly point was not something reserved for the end of time, as if Jesus was talking about heaven and hell or His final coming. Rather, it was a warning about the very imminent destruction that God had in store for unbelieving Judaism. In hindsight, and with the rest of the New Testament to guide us, it is not hard to see this destruction in terms of what happened to Jerusalem at the hands of the Roman in AD 70, when God’s vengeance was let loose against those who had persecuted the true Israel (Christians). But while Jesus’ message was specifically focused on the nation of Israel, the principle is international in application. Thus, throughout the present age, God continues to separate the sheep from the goats by judging or rewarding nations that help or hinder the progress of the gospel (pictured as their response to “the least of these My brethren”).
The obvious Danielian backdrop to this particular parable helps to clinch the fact that it has nothing to do with Christ’s second coming. In Daniel 7, the coming of Son of Man is not His coming to earth. Rather, it is in the other direction: He comes to heaven from earth. When He does so, He takes His seat with the Ancient of Days and assumes dominion of His kingdom (Dan. 7:13-14). The parallels between Daniel 7:13-14 and Matthew 25:31 are too obvious to overlook. By invoking Daniel’s picture to His hearers, Jesus is identifying Himself with Daniel’s Son of Man, showing that He too will be coming to the heavenly throne of the Ancient of Days, to assume dominion of the kingdom in glory. When He does this, He will vindicate the true Israel. As N.T. Wright puts it:
"In Matthew, the other parables in chapter 25 are focused, not on the personal return of Jesus after a long interval in which the church is left behind, but on the great judgment which is coming very soon upon Jerusalem and her current leaders, and which signals the vindication of Jesus and his people as the true Israel. There is, of course, a time-lag to be undergone, but it is not the one normally imagined. It is not the gap between Jesus’ going away and his personal return (the ‘coming of the son of man’ in the literalistic, non-Danielic sense); it is the time-lag, envisaged in Matthew 24, between the ministry of Jesus and the destruction of Jerusalem. This time-lag will be a period in which, in Jesus’ absence, his followers will be open prey to the deceit of false Messiahs, and will face a period of great suffering before their vindication dawns."