Goldman Sachs cuts gold forecast: new target $4,900 amid hawkish Fed stance
The precious metals market received a serious signal from one of the leading investment banks. The gold forecast for the end of the year was cut by $500 to $4,900 per ounce. The reason for this revision lies not in a fundamental change in the nature of the asset, but in macroeconomic pressure, specifically in the revised expectations regarding the monetary policy of the Federal Reserve System.
Even with this adjustment, analysts maintain a positive outlook for the second half of the year, although they acknowledge that the growth potential is now not as high as previously assumed. The key driver of pessimism was the weakening demand for gold-backed exchange-traded funds (ETFs). In May, investors withdrew about $2 billion from such instruments worldwide. Notably, the only region showing inflows was Europe. Asian funds, on the contrary, lost $1.2 billion — for the first time since August 2025.
Fed's Hawkish Stance Pressures Demand
The decline in interest in gold ETFs is directly linked to the changing consensus on the Fed rate. Markets are increasingly less confident in policy easing in 2026. This week, the bank's economists shifted their forecast for rate cuts to June and December of next year, whereas previously the first cut was expected in December 2026 and March 2027.
Moreover, nine Fed officials now anticipate at least one rate hike this year. If this occurs, gold could fall to $4,400 by the end of the year, losing its appeal as a safe-haven asset against political risks. Former President of the Federal Reserve Bank of Dallas and current Vice Chairman of Goldman Sachs, Rob Kaplan, does not rule out such a scenario as early as September.
My analysis: The situation resembles a classic conflict between short-term macroeconomic conditions and long-term structural trends. The Fed's hawkishness is a temporary factor, but it is capable of causing a significant correction. However, central banks continue to increase their reserves, forming a strong "floor" for the price. In April, net purchases by global central banks amounted to 19 tons, and according to a survey by the World Gold Council, 45% of regulators plan to increase reserves over the year. This indicates that institutional demand remains fundamentally strong, and the current drawdown is more of an entry opportunity than a signal of a trend reversal.