Goldman Sachs slashes gold forecast by $500: Fed hawks change the game
Goldman Sachs' research department has adjusted its year-end gold price target, slashing it by $500 to $4,900 per troy ounce. The main reason: the market is radically reassessing expectations for the Fed's monetary policy, almost completely ruling out rate cuts in 2026.
Even after this adjustment, the bank maintains a bullish long-term outlook, but its appetite has become noticeably more modest. The revision was initiated by lead analysts Lina Thomas and Daan Struyven as part of an internal study, where they pointed to weakening demand from gold-backed exchange-traded funds (ETFs).
The key driver of the pressure was a sharp cooling of interest in gold ETFs. According to the World Gold Council, investors withdrew about $2 billion from these instruments globally in May. The only region to show inflows was Europe, while Asian funds lost $1.2 billion — the first time since August 2025. Simultaneously, bearish sentiment is intensifying in the market: traders are actively hedging against a decline in the precious metal.
The weakening interest in ETFs is directly linked to the shift in the consensus on the Fed's rate. This week, Goldman Sachs economists moved their forecast for a rate cut to June and December of next year. While a loosening was previously expected in December 2026 and March 2027, these timelines now appear uncertain.
The Fed itself left the rate in the 3.50–3.75% range this week, but the number of supporters for further hikes is growing. Nine FOMC members already allow for at least one hike in 2026. If this happens, Goldman Sachs forecasts gold will fall to $4,400 by year-end, making it less attractive as a hedge against political risks. Former Dallas Fed President Rob Kaplan, in an interview with Bloomberg, did not rule out a hike as early as September.
However, central banks are supporting the market: in April, they were again net buyers, increasing reserves by 19 tons. A World Gold Council survey shows that about 45% of central banks plan to increase reserves over the year.
Expert comment from Cryptalist: This situation demonstrates a classic conflict between short-term monetary policy and structural demand from the state. As long as Fed hawks dominate, gold will be under pressure, but central bank purchases create a solid "fundamental floor." For crypto investors, this is a signal: if traditional safe-haven assets lose appeal due to tight policy, capital may flow into alternative digital assets, especially during periods of high rate uncertainty.