Goldman lowers end-2026 gold forecast to $4,650, keeps $5,400 target for 2027

For those looking to buy on dips, the bank's updated fair value provides a benchmark, remaining several hundred dollars above the current spot price and portraying the recent pullback as a temporary slowdown rather than a shift in direction. Near-term moves are still tied to Federal Reserve policy, with an anticipated rate increase in October and a stronger dollar posing the biggest obstacles for gold ETF inflows. Central bank purchases underpin prices, meaning that any signal of reduced buying by official institutions would have a larger impact on the outlook than a further rate move. Precious metals miners and gold ETFs will likely mirror how the tug-of-war between rate pressure and structural demand plays out.

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Previously:

• Bitcoin may gain more support than gold as hedge unwinding continues, according to JPMorgan

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Goldman has shifted the expected timing of gold's advance, not the final target: rate increases give bearish investors some breathing room, but ongoing central bank purchases at a record pace ensure the $5,400 objective remains achievable.

Key points:

• In a note released after the Fed's September rate hike, Goldman Sachs reaffirmed its $5,400 per ounce gold target for end-2027, while its economists anticipate a further increase in October.
• The bank cut its end-2026 fair value projection to $4,650 an ounce from $4,900, still above the current spot price of roughly $4,300.
• Tighter monetary policy is seen slowing gold's near-term rise, not reducing its ultimate peak, with three rate cuts expected between September 2027 and March 2028.
• Much of the policy tightening has already been priced into weaker ETF demand.
• Central bank purchases total about 90 tonnes monthly, compared with a pre-2022 average of 17 tonnes, accounting for nearly all of the roughly 23% price gain Goldman forecasts through 2027.
• A more aggressive Fed stance poses the main downside risk, carrying the possibility of a steeper selloff.

Goldman Sachs has reconfirmed its long-term optimistic stance on gold, maintaining its $5,400 per ounce target for end-2027 while lowering its shorter-term outlook due to Fed rate increases. The report, released last Friday and covered by Investing.com, came after the Fed's September 16 meeting, and Goldman's economists now predict another rate hike in October.

Analyst Lina Thomas reduced the bank's year-end 2026 fair value forecast to $4,650 an ounce from $4,900. This level remains above the current spot price of about $4,300, indicating that Goldman still expects gains in the near term.

The central idea is that tighter policy alters the schedule but not the outcome. Higher interest rates will likely continue to pressure gold via ETF demand for now, but Thomas noted that the Fed is still expected to implement three rate cuts between September 2027 and March 2028, keeping the terminal rate unchanged. Therefore, Goldman anticipates that the impact of tighter policy will be a more gradual ascent rather than a reduced peak. The bank also pointed out that the market has already priced in much of the tightening in ETF holdings, which have weakened as bond yields rose and the dollar appreciated.

Central bank demand forms the structural backbone of the forecast. Goldman estimates that official purchases amount to roughly 90 tonnes per month, significantly exceeding the pre-2022 average of 17 tonnes, and attributes nearly all of the expected ~23% price appreciation by end-2027 to that demand. China has been a particularly consistent purchaser, with its central bank extending its buying streak to 22 straight months as of August.

The outlook carries downside risks. Thomas warned that a more aggressive Fed path than Goldman's baseline could provoke a deeper gold correction. For now, the bank's stance is that rate increases postpone the uptrend rather than kill it, making the timing of Fed policy and the staying power of central bank purchases the main factors to monitor.