Goldman Sachs cuts gold forecast to $4,900: Fed hawks pressure the market
The analytical department has revised its year-end gold target, lowering it by $500 to $4,900 per troy ounce. The key factor is a sharp cooling of market expectations regarding the easing of the Federal Reserve's monetary policy in 2026.
Even with this adjustment, the bank maintains a bullish outlook for the second half of the year, although it acknowledges that the growth potential is now less impressive than previously assumed. The revision was initiated after analyzing capital flow dynamics and macroeconomic signals.
Why was the gold forecast lowered?
The main trigger is the weakening demand for exchange-traded funds (ETFs) backed by physical gold. In May, investors worldwide withdrew about $2 billion from these instruments. Notably, the only region showing net inflows was Europe. Asian funds, on the other hand, lost $1.2 billion — the first net outflow since August 2025. Against this backdrop, bearish sentiment in the market is intensifying.
The decline in interest in gold ETFs is directly linked to a reassessment of the probability of a Fed rate cut. This week, the bank's economists shifted their forecasts for the first rate cut from December 2026 to March 2027. The market is increasingly less confident in a "dovish" pivot by the regulator.
The Fed's hawkish stance pressures the metal
The Federal Reserve left its key rate unchanged this week in the range of 3.50–3.75%, but the number of supporters for a rate hike is growing. Already nine FOMC members are considering at least one hike in 2026. Goldman Sachs Vice Chairman and former Dallas Fed President Rob Kaplan, in an interview with Bloomberg, did not rule out that a hike could occur as early as September.
If this scenario materializes, analysts forecast gold falling to $4,400 by the end of the year. In an environment of rising real rates, the metal loses its appeal as a safe-haven asset against political risks.
However, central banks are providing support to the market. In April, they once again acted as net buyers, increasing reserves by 19 tons on a net basis. According to a survey by the World Gold Council, about 45% of central banks plan to increase reserves over the year. This structural factor continues to form a "floor" for prices.
Expert opinion: Goldman Sachs' forecast revision is not a trend reversal, but a pragmatic adaptation to the changed macroeconomic reality. As long as central banks maintain their appetite for gold, the fundamental case for long-term growth remains intact. However, in the short term, traders should prepare for increased volatility and a test of the support level around $4,400–$4,500 if the Fed continues its hawkish course.