Goldman Sachs has cut its gold forecast to $4,900: the Fed's rate decision weighs on the market
The precious metals market has received a signal for a correction: Goldman Sachs analysts have revised their year-end target for gold, lowering it by $500 to $4,900 per troy ounce. The main reason was the weakening of investor confidence in the easing of the Federal Reserve's monetary policy in 2026.
Despite the downgraded forecast, the bank maintains a positive outlook on gold for the second half of the year, but the expected growth will no longer be as aggressive as previously assumed. The key trigger for the revision is a sharp decline in demand for gold-backed exchange-traded funds (ETFs). In May, about $2 billion was withdrawn from such funds worldwide. Only European funds recorded inflows, while Asian funds, on the contrary, lost $1.2 billion — for the first time since August 2025. At the same time, bearish sentiment is intensifying in the market: investors are increasingly hedging against downside risks.
The Fed's Hawkish Stance and Risks of Rate Hikes
This week, the Fed kept the key interest rate in the range of 3.50–3.75%, but the number of supporters of further tightening is growing. Already, nine members of the regulator allow for at least one rate hike this year. Goldman Sachs economists have even shifted their rate forecast to June and December 2026, having previously expected a cut only in December 2026 and March 2027.
If the Fed does decide to raise rates, gold could fall to $4,400 by the end of the year, analysts warn. In this scenario, the metal would lose some of its appeal as a safe-haven asset against political risks. Rob Kaplan, vice chairman of Goldman Sachs and former president of the Dallas Fed, does not rule out that a rate hike could occur as early as September.
Central banks continue to support the market. In April, they were again net buyers, increasing reserves by 19 tons. According to a survey by the World Gold Council, about 45% of central banks plan to increase reserves over the year. This creates a long-term fundamental bullish factor, but in the short term, pressure from US monetary policy remains dominant.
Expert opinion: The current situation resembles a classic conflict between short-term macroeconomic conditions and long-term structural shifts. As long as the Fed maintains a hawkish stance, gold will remain under pressure, but central bank purchases are forming a solid "floor." For crypto investors, this is a signal: in an environment of high uncertainty over rates, diversification into safe-haven assets remains justified, but with cautious timing.