Goldman Sachs Cuts 2026 Gold Forecast to $4,650

Goldman Sachs reduced its year-end 2026 fair value estimate for gold to $4,650 per ounce. The previous estimate stood at $4,900. This adjustment follows the Federal Reserve's interest rate increase on September 16. The bank expects another rate hike in October. These moves pressure the metal in the short term.

Despite the near-term headwinds, the bank holds its end-2027 target at $5,400 per ounce. The current spot price is approximately $4,350. Analyst Lina Thomas noted that tighter monetary policy will temper the rally but not end it. The firm projects a 23% price appreciation through 2027.

Central bank buying drives demand

The bank attributes its long-term outlook to structural buying by central banks. Monthly purchases are currently around 91 tonnes. The pre-2022 average was only 17 tonnes. This surge in physical demand outweighs the negative impact of higher yields. Goldman identifies this as the dominant variable for gold prices.

Exchange-traded fund demand has softened as yields climbed. The dollar has strengthened against the backdrop of higher rates. However, the persistent bid from sovereign treasuries keeps the long-term case intact. The bank views this structural force as independent of short-term rate fluctuations.

Rate path shapes volatility

Goldman economists anticipate three rate cuts between September 2027 and March 2028. The terminal rate remains unchanged from earlier assumptions. This path supports a gradual price increase. The bank expects gold to grind higher despite current tightening.

Risk remains tilted to the upside in the options market. Demand for gold call options as a hedge stays strong. However, two-way volatility could increase. A more hawkish Fed path than expected could trigger a sharper correction. The firm warns of potential downside risks in that scenario.

Divergence from textbook response

Higher rates typically pressure non-yielding assets like gold. Goldman's stance diverges from this standard reaction. The central bank bid for bullion is the key factor. This demand outweighs the drag from monetary tightening. The long-term investment case remains solid according to the bank.

The note was published on September 18. It reflects the latest assessment from the markets desk. The figures highlight a shift in near-term expectations. The structural demand story remains the core of the forecast. The bank maintains its bullish long-term stance.