Bernstein Trims Gold Price Forecast as Real Rates Rise

Gold price forecasts have been updated by Bernstein, with analyst Bob Brackett cutting the firm's long-term forecast to $5,600 an ounce for 2030 from a previous estimate of $6,100. This revision comes as interest rate expectations have shifted from possible cuts at the start of the year to hikes by 2027.

The real rates that gold historically correlates negatively with have risen to around 2.7% from 1.7% in early March, but Brackett notes that gold's price has held up well after recent Fed rate hikes and can continue to rise even as real interest rates climb slowly.

The key driver of the metal's value is central bank buying, with Bernstein believing that central banks have not yet finished diversifying their reserves away from US dollar and other G7 currencies into gold. Large reserve holders like China, Japan, and Saudi Arabia still allocate less than 10% to gold.