Goldman Sachs Reduced Its Gold Price Target for the End of 2026

Goldman Sachs has lowered its year-end gold forecast by $500 to $4,900 an oz. This revised forecast comes as hopes for a 2026 fee lower fade.

The revised goal nonetheless implies features in the second half, although smaller than the financial institution beforehand projected. Analysts Lina Thomas and Daan Struyven outlined the change in a analysis notice.

Why Goldman Lowered Its Gold Forecast

The downgrade stems primarily from a weaker outlook for inflows into gold-backed exchange-traded funds. World Gold Council data confirmed that international gold-backed ETFs skilled outflows of roughly $2 billion in May. 

Europe alone attracted recent inflows that month. Asian funds, in the meantime, logged their first month-to-month outflow since August 2025, with $1.2 billion leaving. At the identical time, investor sentiment has also turned bearish.

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The weaker ETF demand comes as markets reduce expectations for Federal Reserve fee cuts. Earlier this week, Goldman economists pushed again their US rate-cut forecast to June and December of subsequent yr. They had earlier anticipated reductions in December 2026 and March 2027.

“Our gold worth views stay structurally constructive however tactically cautious, with near-term draw back threat and medium-term upside threat,” the analysts said.

The Hawkish Fed Backdrop

Meanwhile, the Fed held its benchmark fee at 3.50% to three.75% this week, however there was growing support for hikes. Nine officers now project at least one hike in 2026. 

Should the Fed really elevate charges, Goldman sees gold sliding to $4,400 by year-end as its attraction as a coverage hedge fades. Rob Kaplan, a Goldman vice chairman and former Dallas Fed president, advised Bloomberg {that a} hike might come as quickly as September.

Still, central financial institution demand gives a flooring. Official patrons turned internet gold purchasers once more in April, including 19 tons. Moreover, in keeping with WGC’s survey, roughly 45% plan to grow their reserves in the coming yr.

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