Goldman Sachs has cut its gold forecast to $4,900: The Fed is changing the game
The precious metals market has received a serious signal to cool down. A leading investment bank has revised its annual gold forecast, slashing it by $500 per ounce to $4,900. The reason lies not in a fundamental change in demand, but in the hawkish stance of the Federal Reserve, which is pushing the prospect of rate cuts indefinitely into the future.
Why did analysts lower expectations?
The key trigger is waning interest from institutional investors. In May, approximately $2 billion was withdrawn from gold ETFs worldwide. European funds saw modest inflows, but this was not enough to offset outflows from Asian instruments, which lost $1.2 billion — the first time since August 2025. The options market is also recording a strengthening of bearish sentiment.
The reason is a reassessment of the probability of a Fed rate cut. Previously, the market priced in at least two easing moves in 2026, but now even Goldman Sachs has pushed its forecast for the first cut to December 2026, with a second expected only in March 2027.
The Fed tightens its rhetoric
This week, the regulator kept the key rate in the range of 3.50–3.75%, but the number of supporters of a hike is growing. Nine FOMC members now allow for at least one increase in 2026. The bank's vice chairman and former Dallas Fed President Rob Kaplan does not rule out that the rate could be raised as early as September.
If this happens, analysts predict gold will fall to $4,400 by the end of the year — the metal's appeal as a hedge against political risks will diminish. However, central banks continue to support the market: in April, they increased their reserves by a net 19 tons, and 45% of regulators surveyed by the World Gold Council plan to increase reserves over the next 12 months.
My view as an analyst: Goldman Sachs' forecast revision is not a panicked move, but a pragmatic adjustment to the new monetary regime. Gold remains a structurally strong asset, but in the short term, pressure from the Fed and ETF outflows will restrain growth. Investors should prepare for increased volatility in the second half of the year, using pullbacks to accumulate positions ahead of a possible policy easing in 2027.