Fed Rate Hikes Won't Deter Goldman's Gold Price Forecast

Gold prices are expected to continue their upward trend in the long term, despite Federal Reserve rate hikes. According to Goldman Sachs analyst Lina Thomas, a $5,400-an-ounce forecast for the end of 2027 remains intact.

This view is based on the assumption that the Fed will cut interest rates three times between September 2027 and March 2028, leaving the terminal rate unchanged. As a result, Thomas expects the impact of tighter monetary policy to be felt primarily through a slower near-term appreciation path rather than a lower terminal gold price.

The bank's year-end fair value estimate has been trimmed to $4,650 an ounce from $4,900, still above the recent spot price of about $4,350. Thomas noted that much of the tightening is already priced into exchange-traded fund demand.

Central bank buying remains a significant structural driver, contributing nearly all of Goldman's expected 23% appreciation through end-2027. Purchases are running at about 91 tonnes a month, well above the pre-2022 average of 17 tonnes. Thomas added that risks remain skewed to the upside, with resilient call-option demand for gold as a macro-policy hedge.