Goldman Sachs has revised its year-end gold price target downwards by $500, now forecasting $4,900 an ounce. This change comes in response to the bank's updated expectation that the Federal Reserve will not implement any interest rate cuts in 2026. This revised outlook on monetary policy significantly impacts gold's attractiveness, as lower interest rates typically make non-yielding assets like gold more appealing to investors.
Previously in March 2026, Goldman Sachs maintained a bullish view on gold, forecasting it to reach $5,400 an ounce by year-end. This earlier projection was partly based on the anticipation of two US rate cuts that year. However, recent strong labor market data has led Goldman Sachs economists to push back their forecast for Fed rate cuts to June and December 2027, effectively removing the expectation of any cuts in late 2026.
The bank's chief US economist, David Mericle, explained that the robust jobs report removed the urgency for the Fed to lower rates this year. The unemployment rate is now expected to rise only modestly to 4.4%, a lower estimate than previously predicted. While Goldman still doesn't anticipate a Fed rate hike, the revised timeline for rate cuts directly influences their gold price outlook.
Goldman Sachs had raised its gold price target to $5,400 per ounce in early 2026, citing factors such as continued central bank purchases and a broadening of diversification to private investors. The current downward revision reflects the significant impact of the changed interest rate outlook on the short-term drivers for gold, despite ongoing institutional demand.
