Goldman Sachs lowers gold forecast to $4,900: hawkish Fed policy pressures the market
A leading investment bank has adjusted its annual gold forecast, lowering its target price by $500 to $4,900 per ounce. The reason is weakening market expectations regarding a loosening of the Federal Reserve's monetary policy in 2026.
Analysts revised their estimates amid significant capital outflows from gold exchange-traded funds (ETFs). According to the latest data, investors worldwide withdrew about $2 billion from these instruments in May. Notably, Europe was the only region to show inflows, while Asian funds lost $1.2 billion — the first time since August 2025. This signals growing bearish sentiment among market participants.
A key factor pressuring gold is the Fed's hawkish stance. Markets are increasingly less confident in the possibility of rate cuts this year. Moreover, nine Fed officials now anticipate at least one rate hike by the end of 2026. If this scenario materializes, Goldman Sachs forecasts gold falling to $4,400, making the metal less attractive as a safe-haven asset.
Dual Market Dynamics
Despite pessimism among speculative investors, fundamental support for gold continues from central banks. In April, net purchases by monetary authorities totaled 19 tons. Furthermore, a World Gold Council survey shows that about 45% of central banks plan to increase their reserves over the next 12 months. This creates a solid "floor" for prices.
Commentary from Cryptalist expert: We are observing a classic divergence between short-term speculative flows and long-term structural demand. As long as the Fed maintains a hawkish stance, gold will remain under pressure, but strategic central bank purchases and ongoing geopolitical risks will prevent the metal from falling below critical support levels. Investors should prepare for volatility, but not a collapse.