Goldman Sachs has sharply downgraded its price forecasts for gold, citing the Federal Reserve’s hawkish rhetoric as the key factor that has calmed investors and reduced fears of a broad fiat currency devaluation.
The bank’s strategists cut their targets markedly. The year‑end 2026 forecast was trimmed to $4,150 per ounce from $4,650, while the year-end 2027 gold price projection was lowered to $4,800 from $5,400. Goldman estimates that the Fed’s expected interest rate hike in December will drag hedging demand back toward historical norms and damp the recent frenzy in bullion markets.
The current market dynamic echoes 2022. Rising interest rates are squeezing retail investors, but large‑scale official buying is preventing prices from collapsing.
Central banks remain the principal structural driver. Goldman projects that regulators will be buying roughly 60 tonnes of gold per month in 2026 and 2027, marking a dramatic rise from the pre‑2022 monthly average of about 17 tonnes. Emerging economies, led by China, continue to steadily increase the share of gold in their reserves. Advanced economies have been less active buyers. Their principal preoccupation amid an erosion of trust has been securing safe jurisdictions for storing existing holdings rather than accumulating more metal.
Goldman Sachs retains a constructive long‑term view on the metal. Strategists expect the Fed to start cutting interest rates only in the second half of 2027. The months ahead will remain challenging for speculators and quant funds, but the current pullback presents an attractive entry point for long‑term investors, the bank sums up.