Goldman Sachs Reaffirms $5,400 Gold Price Forecast Amid Fed Rate Hike
Goldman Sachs has reaffirmed its positive outlook on gold prices, despite the recent Federal Reserve rate hike. The investment bank projects that gold will reach $5,400 per ounce by the end of 2027.
In a statement, Goldman Sachs analyst Lina Thomas said that the rate increase is expected to slow down gold's price rise in the short term but not halt its long-term upward trend.
Thomas noted that higher interest rates will continue to pressure gold prices in the short term, particularly through reduced demand for exchange-traded fund (ETF) products. However, Goldman Sachs believes most of the monetary tightening impact has already been priced into ETF demand.
The analyst also anticipates that The Fed will cut rates three times between September 2027 and March 2028, leaving the terminal interest rate unchanged. Central bank gold buying is one of the main structural factors supporting gold prices, with Goldman Sachs estimating this factor will account for nearly all of gold's potential 23 percent price gain through the end of 2027.
Currently, central banks are purchasing about 91 tons of gold per month, significantly higher than the pre-2022 average of around 17 tons per month. Thomas stated that the risks to gold price movements still lean upward, but warned of potential greater volatility in both directions.