- Goldman Sachs cut its year-end gold price target by $500, down to $4,900 in 2026.
- Fed no longer seen cutting rates in 2026, hurting gold ETF inflow forecasts.
- A Fed rate hike could push gold prices down to around $4,400 by year-end in 2026.
Goldman Sachs Group Inc. has lowered its year-end gold price target by $500 an ounce, bringing the new forecast to $4,900 for December. Analysts Lina Thomas and Daan Struyven attributed the change to a reassessment of Federal Reserve policy, with the bank no longer expecting rate cuts in 2026.
Despite the downgrade, the bank still expects gold to gain ground through the second half of the year, just at a slower pace than previously projected.
Structurally Bullish, but Cautious in the Near Term
The analysts described their stance as constructive over the long run but guarded in the short term. They pointed to near-term downside risk alongside the possibility of upside gains further out, language that reflects a market caught between conflicting forces.
Gold has had a rough stretch in recent months. Conflict in the Middle East initially drove prices higher, which in turn fed expectations of tighter monetary policy. This week’s Federal Reserve meeting added to that pressure. While rates were left unchanged, several policymakers signalled openness to rate hikes later this year. New Fed Chairman Kevin Warsh, meanwhile, made it clear that restoring price stability is his priority.
Why the Forecast Changed
The main driver behind Goldman’s revision is a weaker outlook for inflows into gold-backed exchange-traded funds. The bank’s economists now expect the Fed’s first rate cuts to arrive in June and December of next year, a delay from the previous call of December 2026 and March 2027.
The analysts said that worries about the Fed’s independence may carry less weight than expected, given how hawkish Warsh’s first meeting as chair turned out to be. Warsh was elevated to the role by President Donald Trump, who had publicly criticised his predecessor for not cutting rates aggressively enough.
The Hike Scenario
Should the Fed actually raise rates rather than hold steady, Goldman warned that gold’s appeal as a hedge against macro policy uncertainty could fade more sharply, dragging prices down to around $4,400 by year-end.
That risk is not purely theoretical inside Goldman’s own ranks. Rob Kaplan, the bank’s vice chairman and a former president of the Dallas Fed, told Bloomberg Television this week that a rate hike as early as September is possible if inflation stays elevated.
Where Prices Stand Now
Gold was last seen trading near $4,134 an ounce, putting it on pace for a third consecutive weekly decline. The metal had touched a record high of just under $5,600 an ounce at the end of January before posting three straight monthly losses through May. Silver fell harder, down 2.5% to $64 an ounce.
Geopolitical Backdrop
On the geopolitical side, oil tankers resumed passage through the Strait of Hormuz, and the United States said Thursday that it had lifted its blockade on Iran. However, it is being reported that Iran has suspended its 60-day negotiation period with the US over the direct violation of the MOU’s first clause.
Related: Goldman Sachs Sees No Rate Cuts in 2026, Trump Sees No Reason
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