Goldman Sachs revises gold forecast: new target of $4,900 amid tight Fed policy
The precious metals market has received a signal for a correction. A major investment bank has revised its annual gold forecast, lowering the target price by $500 to $4,900 per ounce. The reason lies in changing expectations regarding the monetary policy of the Federal Reserve (Fed).
Analysts note that markets are increasingly less confident in interest rate cuts in 2026. This factor directly pressures gold's appeal as a safe-haven asset. Even with the lowered forecast, experts maintain a positive outlook for the second half of the year, though they acknowledge that the growth potential is now less significant than previously assumed.
Why the Bank Lowered the Forecast
The main reason for the revision was weakening demand for gold-backed exchange-traded funds (ETFs). In May, investors worldwide withdrew about $2 billion from such funds. Inflows were only seen in European funds, while Asian funds, on the contrary, lost $1.2 billion — for the first time since August 2025. This is accompanied by growing bearish sentiment among market participants.
Interest in gold ETFs is declining amid a reduced probability of Fed policy easing. The bank's economists recently moved the expected timing of the first rate cut to June and December 2027, whereas previously they had projected December 2026 and March 2027. This significantly changes the picture for short-term speculators.
"We remain positive on gold's long-term prospects, but we are cautious in the near term: there is a risk of a decline, although growth is not ruled out in the medium term," analysts note.
Fed's Hawkish Stance
This week, the Fed kept the key rate in the range of 3.50–3.75%, but the number of supporters of further tightening is growing. Nine members of the regulator now expect at least one hike in 2026. If this happens, gold could fall to $4,400 by the end of the year, making it less attractive as a hedge against political risks. The former head of the Federal Reserve Bank of Dallas, now vice chairman of Goldman Sachs, has suggested the possibility of a hike as early as September.
However, central banks are providing support to the market. In April, they once again acted as net buyers, purchasing 19 tons more than they sold. According to a survey by the World Gold Council, about 45% of central banks plan to increase their reserves over the year.
Expert opinion: The downward revision of the gold forecast is not a panic signal, but rather a pragmatic adjustment amid tight monetary policy. For cryptocurrency investors, this is a reminder: classic safe-haven assets are also subject to macroeconomic pressure. At the same time, demand from central banks remains a powerful fundamental factor that could limit the depth of the correction. The gold market is currently at a bifurcation point, and the Fed's September decision will be a key trigger.