Goldman Sachs Reduced Its Gold Price Target for the End of 2026

Goldman Sachs has lowered its year-end gold forecast by $500 to $4,900 an ounce. This revised forecast comes as hopes for a 2026 rate cut fade.

The revised target still implies gains in the second half, though smaller than the bank previously projected. Analysts Lina Thomas and Daan Struyven outlined the change in a research note.

Gold Price Target Year-to-Date. Source: TradingView

Why Goldman Lowered Its Gold Forecast

The downgrade stems mainly from a weaker outlook for inflows into gold-backed exchange-traded funds. World Gold Council data showed that global gold-backed ETFs experienced outflows of roughly $2 billion in May.

Europe alone attracted fresh inflows that month. Asian funds, meanwhile, logged their first monthly outflow since August 2025, with $1.2 billion leaving. At the same time, investor sentiment has also turned bearish.

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Bearish investor positioning in gold options is extremely crowded:

The 6-month put-call skew on the largest US gold-backed ETF, $GLD, is up to 1.03, near the highest since 2017.

The put-call skew measures the relative cost of put options versus call options, rising when… pic.twitter.com/M9EKmlWqHo

— The Kobeissi Letter (@KobeissiLetter) June 17, 2026

The weaker ETF demand comes as markets scale back expectations for Federal Reserve rate cuts. Earlier this week, Goldman economists pushed back their US rate-cut forecast to June and December of next year. They had earlier expected reductions in December 2026 and March 2027.

“Our gold price views remain structurally constructive but tactically cautious, with near-term downside risk and medium-term upside risk,” the analysts said.

The Hawkish Fed Backdrop

Meanwhile, the Fed held its benchmark rate at 3.50% to 3.75% this week, but there was growing support for hikes. Nine officials now project at least one hike in 2026.

Should the Fed actually raise rates, Goldman sees gold sliding to $4,400 by year-end as its appeal as a policy hedge fades. Rob Kaplan, a Goldman vice chairman and former Dallas Fed president, told Bloomberg that a hike may come as soon as September.

Still, central bank demand provides a floor. Official buyers turned net gold purchasers again in April, adding 19 tons. Moreover, according to WGC’s survey, roughly 45% plan to grow their reserves in the coming year.

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