Gold is having a rough June, down 8% month-to-date, and one of Wall Street's most bullish calls just got a trim.
Goldman Sachs lowered its year-end 2026 gold price target to $4,900 per ounce from $5,400, pointing to a more hawkish Federal Reserve and weaker expectations for gold ETF demand. The bank said the revised forecast reflects delayed rate cuts and fading concerns about central bank independence after the first Federal Open Market Committee meeting under Fed Chair Kevin Warsh.
“We are moderating our forecast for gold price appreciation for two reasons,” Goldman analysts Lina Thomas and Daan Struyven wrote in a note published Thursday. The bank pointed to its economists' decision to push back the final two expected Fed rate cuts to June and December 2027, from previous expectations for December 2026 and March 2027.
The bullion – tracked by the SPDR Gold Shares (GLD) – has now fallen for four months in a row after hitting record highs at $5,600 per ounce in January 2026.
Markets Are Pricing In Rate Hikes, Not Cuts
According to CME FedWatch data, markets are assigning roughly a 40% probability of a 25-basis-point rate hike at the July 2026 meeting, while a second hike is becoming increasingly likely later in the year. By the December 2026 meeting, traders see a 61% probability that the federal funds rate will be in the 4.00%-4.25% range, implying two quarter-point hikes from current levels. Expectations become even more pronounced in 2027, with the probability of two Fed hikes rising to nearly 95% by March 2027.
Higher interest rates typically weigh on gold by increasing the opportunity cost of holding a non-yielding asset and reducing demand from rate-sensitive exchange-traded funds.
Why Goldman Remains Bullish Longer Term
Goldman's gold views remain “structurally constructive but tactically cautious with near-term downside risk and medium-term upside risk.” The bank said continued diversification by central banks remains the most important structural driver for gold prices. Goldman estimates central bank purchases currently average about 50 tonnes per month, well above pre-2022 levels, and cited a recent World Gold Council survey showing a record 45% of central banks expect to increase gold reserves over the next 12 months. Goldman also expects support from a gradual normalization in speculative positioning and ETF holdings, which remain below levels implied by interest-rate trends.
Downside And Upside Scenarios
The bank warned that risks remain skewed to the downside in the near term. If Fed hikes materialize and are perceived as more hawkish than justified by economic data, Goldman said gold could fall to around $4,440 per ounce by the end of 2026, as investors unwind macro-policy hedges and ETF holders sell into higher rates. At the same time, Goldman sees meaningful upside over a longer horizon. The bank indicated that geopolitical tensions and concerns about fiscal sustainability could eventually drive stronger private-sector demand for gold. Under a more bullish scenario, prices could climb above $6,000 per ounce by the end of 2026.
The question for the back half of 2026 is whether Warsh's Fed actually delivers the hikes the curve is now pricing — or whether the hedge that drove gold to records reasserts itself before the cuts finally arrive.
