Goldman Sachs Cuts Year-End Gold Target as Fed Holds Rates Steady
Goldman Sachs Group Inc. has lowered its year-end gold forecast by $500 an ounce, citing expectations that the Federal Reserve will not cut interest rates in 2026. The new target of $4,900 per ounce for December suggests that gold is still expected to gain in the second half of the year, albeit at a slower pace than previously projected, according to analysts Lina Thomas and Daan Struyven.
“Our long-term outlook for gold remains structurally positive, but tactically we remain cautious, with short-term downside risks and medium-term upside potential,” they added.
In recent months, gold has faced pressure as the Middle East conflict initially drove energy prices higher, raising expectations for tighter monetary policy. This week, the Fed opted to keep rates unchanged, though policymakers indicated support for potential hikes later in the year. Newly appointed Fed Chair Kevin Warsh emphasized his commitment to restoring price stability.
The reduced forecast also reflects lower projected inflows into gold-backed exchange-traded funds, as expectations for U.S. rate cuts have been pushed back to June and December next year. Previously, cuts were anticipated in December 2026 and March 2027.
Nevertheless, some supportive factors remain for gold, including ongoing central bank purchases, projected at 50 tons per month this year and 40 tons per month in 2027. Gold last traded near $4,168 per ounce, poised for a third consecutive weekly decline. After rallying to a record just below $5,600 per ounce at the end of January, the metal capped a third straight monthly loss in May.
Source : Newsmaker.id
