Goldman Sachs has cut its gold forecast: $500 removed due to the Fed's hawkish stance
The precious metals market received a serious signal from one of the key players on Wall Street. A leading investment bank has revised its year-end gold target down by $500 to $4,900 per troy ounce. The reason for this revision lies not in the fundamental weakness of the asset, but in a change in the macroeconomic landscape, specifically a reassessment of expectations regarding the monetary policy of the Federal Reserve.
The bank's analysts, specializing in commodity markets, directly point to the market's waning belief in interest rate cuts in 2026. The longer the Fed maintains a "hawkish" stance, the less attractive gold becomes as a non-yielding asset. This directly impacts the dynamics of exchange-traded funds (ETFs): according to industry sources, investors withdrew about $2 billion from global gold ETFs in May. Notably, European funds saw a small inflow, but Asian funds lost $1.2 billion, marking their worst performance since August 2025.
Fed Pressure and Scenarios for the Metal
This week, the regulator left the key rate in the range of 3.50–3.75%, but the rhetoric has tightened. Nine FOMC members now anticipate at least one rate hike by the end of the year. If this scenario materializes, the bank's analysts forecast gold falling to $4,400 by year-end. In that case, the metal would lose some of its appeal as a safe-haven asset amid geopolitical risks.
However, the situation is not so clear-cut. Central banks continue to act as key buyers. In April, net gold purchases by global central banks amounted to 19 tons. Moreover, a survey by the World Gold Council shows that about 45% of central banks plan to increase their reserves over the next year. This creates a strong fundamental "floor" for the market.
My view: The revision of the Goldman Sachs forecast is not a trend reversal, but a pragmatic response to a temporary tightening of monetary policy. Institutional demand from central banks remains a structurally bullish factor. For long-term investors, the current correction may open attractive entry points, but in the short term, pressure from a strong dollar and high interest rates will persist. The key support level is $4,400, and a break below it would be a worrying signal.