Goldman Sachs cut its gold forecast to $4,900: the market has stopped believing in a Fed easing
Goldman Sachs analysts have revised their year-end gold price target, lowering it by $500 to $4,900 per ounce. The reason lies in a fundamental shift in market expectations: investors are increasingly less confident in a Federal Reserve (Fed) interest rate cut in 2026.
The forecast adjustment is linked to a noticeable weakening in demand for gold-backed exchange-traded funds (ETFs). According to the World Gold Council, investors withdrew approximately $2 billion from such instruments globally in May. Notably, Europe was the only region to show net inflows. Asian funds, on the other hand, lost $1.2 billion—the first outflow since August 2025. Against this backdrop, bearish sentiment is intensifying in the market.
The key driver of this dynamic is a reassessment of expectations regarding Fed monetary policy. This week, Goldman Sachs economists moved their forecast for the first rate cut from December 2026 to March 2027, reflecting growing market confidence in the regulator maintaining a hawkish stance.
Fed Hardens Rhetoric
The Federal Reserve left its key interest rate unchanged this week in the range of 3.50–3.75%, but the number of advocates for a rate hike is growing. Nine Fed officials now see at least one rate increase in 2026. Former Dallas Federal Reserve Bank President Rob Kaplan does not rule out that this could happen as early as September.
In a scenario where the Fed does raise rates, Goldman Sachs analysts forecast gold falling to $4,400 by year-end. In such a situation, the precious metal loses its appeal as a safe-haven asset against political risks.
Nevertheless, central banks continue to provide support to the market. In April, they were again net buyers, increasing reserves by a net 19 tons. A World Gold Council survey shows that about 45% of central banks plan to increase their reserves over the course of the year.
Expert opinion: The downgrade of Goldman Sachs' forecast is not a reversal of the long-term trend, but an adjustment against the backdrop of changing macroeconomic realities. Central bank buying activity remains a powerful fundamental anchor for gold, but in the short term, the Fed's hawkish stance will put pressure on the metal. Investors should prepare for increased volatility and a reassessment of their expectations for returns on safe-haven assets.