Goldman Sachs lowered its 2026 gold forecast to $4,900 as delayed Fed rate cuts and persistent inflation pressure gold and Bitcoin.
Gold News
Gold's rally this year is losing steam under the weight of a shifting rate outlook. Goldman Sachs lowered its year-end forecast for the metal to $4,900 an ounce, down $500 from its prior estimate of $5,400.
CME's FedWatch tool shows markets are pricing in a high probability of rates holding steady or rising through the remainder of 2026, compared with the Fed's current target range of 3.5% to 3.75%. That backdrop has forced a reassessment of how much further gold can climb this year.
Goldman pointed to a delayed Federal Reserve rate cut timeline as the main driver behind the downgrade. The bank now expects rate cuts in March 2027 and December 2027, pushing back earlier expectations.
"Our gold price views remain structurally constructive but tactically cautious, with near term downside risk and medium term upside risk," Goldman Sachs commodity analysts Lina Thomas and Daan Struyven said, according to Bloomberg.
Gold Approaches $4,000 Mark
Gold has dropped more than 20% from its January highs and now trades within roughly $150 of the $4,000 level, according to GoldPrice. Bitcoin (BTC) has fallen approximately 30% in the same period, according to Vortex.
Source: Vortex
A slower path to rate cuts tends to weigh on cryptocurrencies as well, since lower rates typically favor digital assets such as BTC. Escalating geopolitical tensions in the Middle East have compounded the pressure on both markets.
Last week, analysts warned that Bitcoin and gold could face further headwinds in 2026 following a 4.2% annual increase in the US Consumer Price Index for May. That inflation data, combined with the regional tensions, has weighed on sentiment across both asset classes.
Related Article: Central Bank Ditching Dollars for Bitcoin and Gold, Fidelity Says
Inflation Data Holds Key to Risk Appetite
Since gold pays no yield, rising rates make holding it more expensive relative to bonds or cash. The market appears to be repricing the broader assumptions that drove gold to record highs earlier this year.
"Only when inflation drops, rate cuts become viable, and liquidity improves alongside lower capital costs, will the overall risk appetite truly reverse," HashKey Group senior researcher Tim Sun said.
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