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Goldman Sachs Slashes Gold Price Forecast
19 Jun
Summary
- Goldman Sachs revised year-end gold forecast to $4,900/oz.
- Lowered outlook attributed to decreased ETF inflows and weaker sentiment.
- Fed's hawkish stance and potential rate hikes impact gold's appeal.
Goldman Sachs has revised its year-end gold price forecast downwards by $500, setting a new target of $4,900 per ounce. This adjustment reflects fading expectations for a Federal Reserve rate cut in 2026 and a more cautious near-term outlook for the precious metal.
The primary driver for this downgrade is a projected decrease in inflows into gold-backed exchange-traded funds. In May, global gold ETFs experienced outflows totaling approximately $2 billion, with Asian funds logging their first monthly outflow since August 2025.
This weaker demand for ETFs coincides with markets scaling back their anticipation of Fed rate reductions. Goldman economists have postponed their forecast for US rate cuts to June and December of next year. Despite these headwinds, central bank purchases of gold are providing a floor, with officials planning to increase reserves.
Should the Federal Reserve opt for a rate hike, Goldman anticipates gold could fall to $4,400 by year-end, diminishing its role as a policy hedge. However, persistent central bank demand and planned reserve growth offer underlying support for gold prices.
