Goldman Sachs has cut its gold forecast: $4,900 instead of $5,400 due to Fed policy
Goldman Sachs' analytical department has revised its year-end gold price target, lowering it by $500 to $4,900 per troy ounce. The reason for this move is a sharp shift in market expectations regarding the monetary policy of the US Federal Reserve. Investors are increasingly less confident in rate cuts in 2026, which directly pressures the appeal of the precious metal as a safe-haven asset.
The key trigger for the revision was the weak dynamics of inflows into gold-backed exchange-traded funds (ETFs). According to the World Gold Council, in May, investors withdrew approximately $2 billion globally from such instruments. European funds saw a slight inflow, but Asian funds, on the contrary, lost $1.2 billion — the first net outflow from the region since August last year. Against this backdrop, bearish sentiment in the market has noticeably intensified, confirmed by a rise in short position volumes.
Earlier this week, Goldman Sachs economists adjusted their own forecast for the Fed rate, moving the expected cut from December 2026 to March 2027. The bank now does not rule out that the regulator may not cut rates at all this year. If the Fed decides to raise rates — and nine regulator officials already allow for at least one increase in 2026 — gold could fall to $4,400 per ounce.
Central banks save the market
Nevertheless, fundamental support for gold remains. In April, global central banks 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 reserves over the next year. This indicates that structural demand from government institutions remains robust, despite short-term pressure from US monetary policy.
Expert opinion: The revision of Goldman Sachs' forecast is not a trend reversal, but a temporary reassessment amid the hawkish rhetoric of the Fed. Gold remains in a long-term upward channel, and central bank purchases form a reliable "floor" for the price. However, in the coming months, the market will be extremely sensitive to every statement from Washington.