• Goldman Sachs (NYSE:GS) lowered its gold forecasts, citing a more restrictive Fed path and weaker investor demand.
  • The bank now sees gold at $4,150 by end-2026 and $4,800 by end-2027, down from $4,650 and $5,400, respectively.
  • Central bank buying remains a key support, with Goldman forecasting 60 tonnes per month, offering roughly 15% upside by end-2027.

Goldman Sachs has trimmed its gold price targets, but the bank isn’t abandoning its longer-term bullish stance. The revision, reported on November 5, reflects a delay in the expected rally rather than a change in the structural story. Tighter U.S. monetary policy is weighing on investor demand, while central-bank purchases continue to provide a solid floor.

The bank now expects gold to reach $4,150 per ounce by the end of 2026, down $500 or about 10.8% from its previous target of $4,650. For end-2027, the forecast was cut to $4,800 from $5,400, a reduction of $600 or roughly 11.1%. The revisions were first reported by Bloomberg and confirmed by people familiar with the matter.

A More Hawkish Fed Path

The downgrade is rooted in Goldman’s updated monetary policy assumptions. The bank’s base case now incorporates a December rate hike from the Federal Reserve, followed by rate cuts beginning in late 2027 and continuing into early 2028. Higher rates increase the opportunity cost of holding gold, which pays no interest, and can also curb fears of currency debasement that have driven some of the metal’s appeal.

“The shift reflects a more restrictive policy environment than we previously anticipated,” said a person familiar with the bank’s thinking, who asked not to be identified discussing internal forecasts. “But the structural demand from central banks remains intact.”

Goldman also expects a firmer policy stance to reduce unusually strong demand for gold call options, which had provided upside exposure. Additionally, higher oil prices could add pressure through systematic selling, while a sharp equity decline might initially depress gold if investors sell liquid assets to meet margin calls.

Central Banks to the Rescue?

Despite the near-term headwinds, Goldman forecasts central-bank purchases of 60 tonnes per month through 2026–27, well above the pre-2022 average of 17 tonnes. The bank’s estimate of recent buying is even higher, at 85 tonnes monthly on a seasonally adjusted, three-month basis. These purchases are expected to support prices and provide approximately 15% upside by end-2027 from current levels.

“Central banks are diversifying reserves away from the dollar, and gold is a key beneficiary,” said an analyst who declined to be named. “That trend is unlikely to reverse anytime soon.”

Goldman identifies China as still underweight gold relative to plausible longer-term allocations, while many developed-market central banks already hold substantial historical reserves. Reserve security is also becoming more prominent, with the discussion shifting from whether to own gold toward where to store it, reflecting concerns about cross-country trust.

Market Reaction and Implications

The downgrade did not produce an unambiguous immediate selloff. Gold reached a more-than-two-week high on Thursday as the dollar and Treasury yields weakened, and Friday reporting described a pullback while gold remained on course for a weekly gain. That illustrates how daily market moves can differ from a bank’s medium-term forecast.

The revised targets represent a reversal from earlier optimism. In October 2025, Goldman raised its December 2026 target to $4,900, citing Western gold-ETF inflows, central-bank purchases and anticipated Fed easing. Its December 2025 outlook assumed 50 basis points of Fed cuts during 2026 and central-bank purchases of 70 tonnes monthly. The latest $4,150 target therefore reflects a materially different monetary-policy path, not simply a small adjustment to the same assumptions.

Goldman’s published scenarios are conditional. In a more restrictive policy scenario—with another hike in March 2027, delayed cuts or a higher peak rate—the bank sees an illustrative end-2027 outcome of $4,660. Renewed fiscal-sustainability concerns could drive stronger hedge demand and potential upside beyond $4,800.

The most important distinction is between the short-term rate cycle and the longer-term reserve-diversification trend. Goldman now expects the first to restrain gold for longer, while the second continues to support eventual appreciation. Whether that balance holds will depend on actual Fed decisions, inflation and energy developments, and whether central-bank purchases remain as strong as the bank assumes.

Goldman Sachs declined to comment beyond its published research. A spokesperson for the Federal Reserve did not respond to a request for comment.

Correction: November 6, 2026: An earlier version of this article misstated the pre-2022 average monthly central-bank purchases. It was 17 tonnes, not 15 tonnes.