Goldman Sachs Cuts Gold Price Forecast to $4,900 on Fed Rate Hike Expectations – NaturalNews.com
Goldman analysts Lina Thomas and Daan Struyven described their view as “structurally constructive but tactically cautious” in a June 19 note. The precious metal reached a record near $5,600 in January but fell sharply as geopolitical tensions and inflation concerns reduced expectations for Fed rate cuts. [N-4]. Gold recorded three consecutive monthly losses from March to May and is down 4% year-to-date. [1]. The new target still implies a second-half rally but at a slower pace than previously projected.
Institutional investors had widely anticipated gains, with a Goldman Sachs survey showing 36% expected gold to surpass $5,000 per ounce by year-end 2026, according to NaturalNews.com on December 4, 2025 [6]. However, the appointment of Kevin Warsh as Federal Reserve chair in late January triggered a sharp sell-off; gold fell 12% from its January 29 peak to around $4,800 in its steepest one-day loss in more than a decade, as reported by RT.com [7].
Fed Policy Shift and Rate Hike ProbabilityThe Federal Reserve’s first meeting under new Chair Kevin Warsh on June 17 signaled a hawkish stance, with Warsh vowing to restore price stability, according to market reports. [4]. Traders now see an 87% chance of a rate hike in December, up from 61% before the Fed decision, as measured by the CME FedWatch Tool. Goldman economists factored in slower ETF inflows, expecting rate cuts delayed to June and December 2027. [N-4].
Higher interest rates typically strengthen the dollar and increase the opportunity cost of holding non-yielding assets like gold, according to the Trends Journal in May 2023 [3]. The bank noted that concerns over Fed independence may be limited given the “surprisingly hawkish” first meeting under Warsh. [N-4].
Further Downside Risk and Central Bank SupportGoldman analysts said a rate hike could drive the year-end forecast down another $500 to $4,400, as “demand for gold as a macro policy hedge could unwind more persistently.” [N-4]. Goldman Vice Chairman Rob Kaplan flagged a possible rate hike as soon as September if inflation remains elevated, in a Bloomberg interview. Despite headwinds, Goldman cited robust central-bank buying as a supportive factor, with official sector purchases estimated at 50 tons per month in 2026 and 40 tons in 2027. [N-4].
The combination of monetary policy uncertainty and official-sector demand creates divergent forces for gold prices. Historically, central bank accumulation has provided a floor for gold, as noted in earlier Goldman analysis. [N-4]. The bank’s earlier January report emphasized that persistent macro policy risk combined with continued central bank buying and renewed ETF inflows has created a higher base for prices. [N-4].
Conclusion: Market Context and OutlookThe forecast revision aligns with broader market adjustments following the Fed’s hawkish pivot. Goldman’s outlook incorporates both near-term downside risks from potential rate hikes and medium-term upside from central bank buying. The report noted that the bank’s view remains “structurally constructive” despite tactical caution. [5]. Traders and investors will monitor economic data and Fed communications for further signals on the direction of monetary policy.
As gold prices currently trade near $4,100, down 27% from January highs, the path forward depends on whether the Fed delivers a rate hike or holds steady. The bank’s dual scenario underscores the uncertainty inherent in central bank policy and its effect on precious metals. [5].
References
