Goldman Sachs cuts gold target by $500 amid Fed uncertainty

Goldman Sachs cut its gold target by $500 to $4,900 per ounce, citing delayed Fed rate cuts, high interest rates, and weaker ETF inflows. The bank remains long-term positive but warns of near-term pressures.

Goldman Sachs has revised its year-end gold price target, lowering it by $500 to $4,900 per ounce from the previous $5,400 forecast. This adjustment is primarily due to expectations that the Federal Reserve will delay interest rate cuts until 2027, rather than 2026 as previously anticipated. The bank highlights several factors behind this decision, including persistently high interest rates, reduced inflows into gold-backed ETFs, and a stronger U.S. dollar. Analysts note that while the long-term outlook for gold remains structurally positive, short-term pressures are likely due to tighter monetary policy and changing investor sentiment. Goldman Sachs also points to the Fed’s hawkish stance under new leadership and the potential for further rate hikes if inflation stays elevated. Despite these challenges, the bank continues to view gold as a valuable diversification asset, especially amid ongoing geopolitical tensions and inflationary risks. The revision also suggests that both gold and Bitcoin could face continued headwinds as markets adjust to shifting interest rate expectations.