Goldman Sachs has adjusted its year-end forecast for gold to $4,900 per ounce, reducing its previous target by $500. The bank’s revised outlook reflects growing skepticism that the US Federal Reserve will implement interest rate cuts this year. Instead, rate reductions are now anticipated to be delayed until early and late 2027, putting near-term pressure on gold prices.
The decision comes amid broader market uncertainties as sustained high interest rates tend to make non-yielding assets like gold less attractive compared to bonds or cash. Since the start of 2026, gold has declined over 22% from its January high, inching closer to the $4,000 mark, a level not seen since the end of last year. This downward movement coincides with strains in global geopolitical tensions, such as the conflict in the Middle East, which has also affected market sentiment.
Goldman Sachs analysts described their view on gold prices as structurally positive over the long term but cautious in the near term due to these risks. The absence of imminent Fed rate cuts is a significant headwind not only for gold but also for cryptocurrencies, with Bitcoin dropping more than 28% since January amid rising interest rates and geopolitical turmoil.
Rising inflation figures and prolonged hawkish monetary policy have challenged the "easy money" environment that propelled gold to record highs earlier this year. Market tools such as CME’s FedWatch currently indicate a strong probability that rates will either remain steady or increase in 2026, which further dampens expectations for a swift turnaround in risk appetite.
Experts suggest that only a drop in inflation, followed by tangible rate cuts and improved liquidity, will restore positive momentum to gold and other risk-sensitive assets.