Goldman Sachs lowered its end-2027 gold forecast to $4,650 an ounce from $4,800. The bank expects further Federal Reserve rate hikes to weigh on private investor demand, but it still sees upside from current spot prices.
Goldman Sachs cut its end-2027 gold forecast to $4,650 an ounce from $4,800 previously. The bank cites a more challenging near-term outlook, as expectations of further Federal Reserve interest rate hikes threaten to weigh on private investor demand for the metal.
The revision is a reduction of $150, or 3.1%. However, the bank still sees 16% upside from current spot prices by December 2027. It expects private investor demand to recover once the Federal Reserve begins cutting interest rates late next year.
Goldman's economists now expect a third 25-basis-point rate increase in March 2027. That follows a second hike expected in December 2026, which the bank had already built into its previous base case. A rising federal funds rate is expected to weigh on private-sector investor positioning through early 2027, creating a headwind for gold despite continued central bank accumulation.
Goldman said it adjusted its December 2027 forecast lower in line with its previously outlined downside scenario, reflecting the prospect of tighter monetary policy for longer. It remains constructive on gold over the longer term, supported by structurally strong central bank purchases, including continued buying by China's central bank.
The bank expects investment demand to return once the Federal Reserve begins easing in December 2027, which would remove an important constraint on prices.
Source: Investing.com
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