Goldman Sachs has revised its gold forecast to $4,900 due to the Fed's hawkish stance.
A leading investment bank has revised its annual gold forecast downward by $500 to $4,900 per troy ounce. The reason lies in changing market expectations: investors are increasingly less confident in a loosening of the U.S. Federal Reserve's monetary policy in 2026.
Even with this adjustment, the bank's experts maintain a positive outlook for the precious metal in the second half of the year. However, they believe the pace of growth will no longer be as impressive as previously assumed. Analysts Lynn Thomas and Daan Struyven presented the updated data in their research note.
Why was the forecast lowered?
The main trigger for the revision was the weakening demand for gold-backed exchange-traded funds (ETFs). In May, investors worldwide withdrew approximately $2 billion from these funds. European funds saw a slight inflow, but Asian funds, on the contrary, lost $1.2 billion — the first net outflow since August 2025. Against this backdrop, bearish sentiment is strengthening in the market.
The decline in interest in gold ETFs is directly linked to the fact that markets have stopped pricing in a Fed rate cut. This week, the bank's economists shifted their rate forecasts to June and December of next year. Previously, they had expected cuts in December 2026 and March 2027.
The Fed's hawkish stance pressures the market
The Fed kept its key interest rate in the range of 3.50–3.75% this week, but the number of supporters for further increases is growing. Nine members of the regulator are now advocating for at least one rate hike in 2026.
If the Fed does decide to tighten, gold could fall to $4,400 by the end of the year, analysts predict. In this scenario, the metal would lose its appeal as a safe-haven asset. Former Dallas Federal Reserve Bank President Rob Kaplan, now Vice Chairman of Goldman Sachs, has acknowledged the possibility of a rate hike as early as September.
Support from central banks
Nevertheless, the market is supported by central banks. In April, they continued to increase their gold reserves, buying 19 tons more than they sold. A survey by the World Gold Council shows that about 45% of central banks plan to increase their holdings over the course of the year.
Cryptalist analytical commentary: The downward revision of Goldman Sachs' forecast is a signal that cannot be ignored. However, I see this more as a correction of inflated expectations rather than a reversal of the long-term trend. Central bank purchases remain a powerful fundamental factor that could offset pressure from the Fed. For crypto investors, this is also an important indicator: if gold loses its "safe haven" status, some capital could flow into Bitcoin, which has repeatedly demonstrated an inverse correlation with traditional safe-haven assets.