Goldman Sachs recently lowered its 2026 year-end gold price forecast by $500 per ounce, as the Fed is not expected to cut interest rates again this year.
In recent years, the Wall Street giant has been one of the most steadfast and high-profile bullish voices in the gold market.
This downward revision to the gold target price marks a slight shift in the bank’s tone.
June 21 – Goldman Sachs recently lowered its 2026 year-end gold price forecast by $500 per ounce, as the Fed is not expected to cut rates again this year.
Analysts Lina Thomas and Daan Struyven said in a report that the December gold target price has been reduced to $4,900 per ounce. This implies that gold prices are still expected to rise in the second half of this year, but the increase will be smaller than previously anticipated.
“We remain structurally constructive on gold, but tactically cautious, with downside risks in the near term and upside risks in the medium term,” they noted.
In recent years, the Wall Street giant has been one of the most steadfast and high-profile bullish voices in the gold market. Among a series of positive forecasts, the bank advised investors to “boldly buy gold” at the end of 2024 and accurately predicted a sharp rally. This downward revision to the gold target price marks a slight shift in the bank’s tone.
Gold prices have remained under pressure in recent months. The Middle East war has pushed up energy prices, thereby reinforcing market expectations of tighter monetary policy. Last week, the Fed chose to keep interest rates unchanged, but more policymakers expect a rate hike this year. Meanwhile, new Fed Chairman Kevin Warsh has vowed to restore price stability.
Goldman Sachs analysts said the main reason for lowering the gold price forecast is that, as the bank’s economists have postponed expectations for Fed rate cuts to June and December next year (previously expected in December 2026 and March 2027), expected inflows into gold exchange-traded funds (ETFs) will be reduced.
They added that, given the “surprisingly hawkish stance” at the first Fed meeting under Warsh, market concerns about central bank independence may ease. Warsh was appointed by U.S. President Donald Trump, who had repeatedly criticized his predecessor for insufficient rate cuts before promoting Warsh.
The analysts also warned that if the Fed does raise rates, “demand for gold as a macro policy hedge could unwind more persistently,” and the year-end gold price could fall to $4,400 per ounce.
Some senior executives at Goldman Sachs have already pointed out this possibility.
Goldman Sachs Vice Chairman and former Dallas Fed President Rob Kaplan said in an interview last week that the Federal Reserve may need to raise interest rates as early as September if inflation remains elevated.
Despite this, analysts also noted that factors such as central bank gold purchases continue to support gold prices. They expect official sector gold buying to average 50 tons per month this year and 40 tons per month next year.
Last week, international gold prices fell again amid volatility. As of the close on June 19, spot gold was quoted at $4,157.808 per ounce, down 1.45% for the week, marking a third consecutive weekly decline. After surging to a record high of nearly $5,600 per ounce in late January, gold prices recorded a third consecutive monthly decline in May.
