Analytical gold forecast: Goldman Sachs slashes target by $500 amid hawkish Fed stance
The precious metals market is receiving a significant correction signal. Leading analysts have revised their annual gold forecast, lowering the target price by as much as $500 to $4,900 per troy ounce. The key catalyst for this decision is a fundamental shift in expectations regarding the monetary policy of the U.S. Federal Reserve System.
Reason for the Revision: Fed Rates and ETF Outflows
The main driver of the bearish scenario is the weakening demand for gold-backed exchange-traded funds (ETFs). According to the latest data, in May, investors withdrew approximately $2 billion from these instruments globally. Notably, the only region to show net inflows was Europe. Asian funds, on the other hand, lost $1.2 billion — the first negative result since August 2025. Sentiment in the derivatives market is also becoming increasingly bearish.
The reason for this sharp cooling of interest is a reassessment of the probability of a Fed rate cut. Economists have revised their baseline scenario, shifting the expected timing of the first policy easing from December 2026 to a later period. This deprives gold of one of its main growth drivers — low alternative costs of holding the metal.
Hawkish Fed Stance and Alternative Scenario
This week, the regulator kept the key rate in the range of 3.50–3.75%, but the rhetoric has become noticeably more hawkish. Already, nine FOMC members are open to at least one rate hike this year. If this scenario materializes, gold could face even more severe pressure. In this case, analysts predict a price drop to $4,400 by the end of the year, as the metal would lose its appeal as a safe-haven asset against political risks. Moreover, the former Dallas Fed president and current bank top manager does not rule out that a rate hike could occur as early as September.
Support from Central Banks
Nevertheless, gold should not be written off. Global central banks continue to provide strong support to the market. In April, they once again acted as net buyers, increasing their 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 their holdings over the next 12 months. This structural factor remains a key bullish argument for long-term investors.
Cryptalist Comment: The revision of the Goldman Sachs forecast is not a trend reversal, but a sobering reality for those who bet on an imminent Fed policy easing. As long as the regulator maintains a hawkish stance, gold will trade under pressure. However, fundamental support from central banks remains so strong that any significant decline will likely be perceived as an opportunity to enter the asset at an attractive price. The key level to watch is the $4,400 zone, a break of which could seriously alter the medium-term picture.