The bank trimmed its year end forecast by $500 an ounce after the Federal Reserve.
Gold’s blistering rally has hit a wall, and the bank that helped fuel the hype is now pumping the brakes.
Goldman Sachs lowered its year end gold price target by $500 on June 19, dropping the figure to $4,900 an ounce from $5,400. The bank still expects gains from current levels, just smaller ones than it had been promising clients for most of 2026, according to Seeking Alpha.
The shift comes after gold hit an all time high near $5,600 an ounce in late January before sliding steadily ever since.
The Federal Reserve is driving the reversal
Goldman no longer expects the Fed to cut interest rates at all in 2026, a complete reversal from its earlier outlook. Lower rates typically make gold, which generates no yield, more attractive compared with bonds and cash. Goldman’s original $5,400 target relied heavily on aggressive rate cuts weakening the dollar and pushing investors toward bullion.
That scenario no longer holds. The Fed held rates steady at its most recent meeting, and new Chair delivered a more hawkish tone than expected during his first meeting leading the central bank, Bloomberg reported. Goldman’s economists have pushed their projected rate cuts back to June and December 2027, a delay from the December 2026 and March 2027 timeline they previously expected.
Falling ETF demand adds to the pressure
Interest rates were not the only factor behind Goldman’s revision. The bank also reduced its projections for inflows into gold exchange-traded funds, which have served as one of the most reliable sources of demand throughout gold’s recent run. A less dovish Fed combined with weaker ETF demand creates a notably less favorable setup than the one Goldman was working from in January.
The downgrade carries extra weight given Goldman’s reputation as one of the most consistently bullish major banks on gold in recent years.
A more severe downside scenario remains on the table
Goldman’s revision was not limited to trimming its base case. The bank warned that if the Fed raises rates instead of holding steady, gold could fall as far as $4,400 by year end, since a hike would undercut gold’s appeal as a hedge against policy uncertainty, Bloomberg reported.
That possibility is not purely theoretical. Goldman Sachs vice chairman and former Dallas Fed president Rob Kaplan said in a Bloomberg Television interview that the Fed could be forced to raise rates as soon as September if inflation remains stubborn.
Market pricing reflects similar concerns. CME FedWatch data shows traders assigning roughly a 40% probability to a quarter-point hike in July, with a 61% chance of two cumulative hikes by December. Those odds climb to nearly 95% by March 2027, according to Benzinga.
Gold still has supporters
Despite the cooling outlook, central banks have continued buying gold. Official institutions returned to net buying in April, adding 19 tonnes, and roughly 45% of central banks surveyed by the World Gold Council said they intend to keep growing reserves over the next year, Mining.com reported.
Goldman has defended its bullish stance before in 2026, reaffirming the $5,400 target on April 4 after gold suffered its worst monthly decline since 2013. The bank had actually raised that target from $4,900 in January, citing the same central bank buying and ETF demand it now says is weakening.
Other major banks remain far more bullish
Not every Wall Street firm is following Goldman’s lead. Wells Fargo raised its 2026 target to a range of $6,100 to $6,300 on March 28, framing the recent pullback as a buying opportunity rather than a warning sign. JPMorgan and UBS remain even higher, at $6,300 and $6,200, respectively, well above Goldman’s revised figure.
The widening gap between forecasts suggests major banks are interpreting the same economic data very differently. Goldman believes the Fed’s patience fundamentally changes gold’s trajectory, while banks projecting figures near $6,000 are betting that central bank demand and broader currency trends will outweigh near term Fed decisions.
What it means for investors
A single price target cut does not amount to a bearish call on gold. Goldman still expects gains by year-end and maintains that long-term factors, including currency debasement and fiscal concerns, remain intact.
The bigger takeaway is how heavily gold’s near-term path now depends on a handful of upcoming Fed meetings. Faster than expected cooling in inflation could revive the rate cut narrative quickly, while a surprise hike could validate Goldman’s more cautious downside scenario.