Goldman Sachs cuts gold forecast: $4,900 is the new target amid the Fed's hawkish stance
The precious metals market received a serious signal: a leading investment bank revised its annual gold forecast downward by $500 to $4,900 per ounce. The main catalyst for this decision is a sharp shift in market expectations regarding the monetary policy of the Federal Reserve System.
Analysts, who traditionally held a bullish view on gold, now acknowledge that the momentum for Fed rate cuts has virtually stalled. The market is increasingly less confident in policy easing in 2026, and this directly pressures gold's appeal as a safe-haven asset that does not generate interest income.
Why was the forecast lowered?
A key indicator is the outflow of capital from gold exchange-traded funds (ETFs). In May, investors withdrew about $2 billion from these instruments globally. European funds saw inflows, but this was insufficient to offset the losses. Asian funds, on the other hand, recorded an outflow of $1.2 billion—the first since August 2025. This suggests that even traditional buyers from Asia are beginning to take profits.
Sentiment in the derivatives market has also shifted bearish. Market participants are actively increasing hedges against price declines, confirming waning faith in immediate growth.
The Fed offers no chance for a cut
This week, the Fed kept the key rate in the range of 3.50–3.75%, but the rhetoric has become noticeably more hawkish. The number of proponents for further rate hikes has increased to nine. Some analysts predict that the first hike could occur as early as September, rather than at the end of the year as previously assumed.
If the Fed does decide to tighten, Goldman Sachs envisions a scenario where gold falls to $4,400 by the end of the year. In that case, the metal would lose some of its appeal as a hedge against political and economic risks.
Central banks remain bullish
The only bright spot for gold remains demand from global central banks. In April, they were again net buyers, acquiring 19 tons of metal on a net basis. A survey by the World Gold Council shows that about 45% of central banks plan to increase their reserves over the year. This provides fundamental support, but under current conditions, it cannot outweigh the pressure from monetary policy.
Expert opinion: The revision of Goldman Sachs' forecast is not just a correction but a reflection of a paradigm shift. The market is transitioning from an era of "cheap money" and expectations of easing to the reality of high rates. For gold, this means losing a key growth driver. However, I am not quick to completely write off the metal: structural demand from central banks and geopolitical instability remain powerful supporting factors. In the short term, we will likely see consolidation in the range of $4,700–$5,000, but without a new catalyst, a breakout above $5,200 is unlikely.