America to the bank giant Goldman Sachs he has cut his own gold rate forecast for the end of 2026, citing the Federal Reserve’s view of lowering interest rate expectations.
The bank now expects gold to reach $4,900 an ounce by December 2026, down from its previous target of $5,400.
The revision reflects Goldman Sachs’ view that the Fed will not cut rates this year, reducing demand for gold through exchange-traded funds (ETFs).
The update comes as gold faces pressure from a stronger US dollar and expectations of tighter monetary policy. Gold closed Friday at about $4,155 an ounce, down about 4% on the year.
Goldman Sachs cut its gold price target after pushing back on its expectations for a US interest rate cut, dampening sentiment for gold-backed ETFs.
The bank now expects to cut rates in June and December 2027, instead of starting at the end of 2026. The revision follows a meeting of the Federal Reserve where policymakers kept rates unchanged but showed support for future hikes.
Higher interest rates often weigh on gold prices because the metal is not cash-strapped, which makes yields look better. money.
The price of gold shares
Despite falling gold prices, the bank continues to maintain a positive long-term outlook for bullion.
The bank said its outlook remains stable, supported by continued central bank purchases and demand for gold as a portfolio hedge.
“Our gold price outlook remains stable but cautious, with medium-term and medium-term downside risks,” the analysts said.
At the same time, Goldman Sachs expects gold stocks to be bought at 50 tons per month this year and 40 tons per month in 2027.
However, the experts warned that the Fed’s expansion could create other risks.
In a scenario where interest rates are high and demand for gold is shrinking, the bank sees gold ending the year at around $4,400 an ounce.
Overall, gold sentiment weakened after the Federal Reserve signaled that interest rates could remain high for a longer period of time. Although rates were left unchanged, nine of the 19 policy makers expected at least one increase this year.
Hawkish sentiment lifted the US dollar to a one-year high and increased expectations of further rate hikes before the end of the year.
A strong dollar and higher prices often weigh on gold by making the non-yielding metal less attractive to investors.
