Goldman Sticks to $5,400 Gold Target Despite Fed Rate Hike

Goldman Sachs has reaffirmed its $5,400 target for gold by the end of 2027, despite the Federal Reserve's recent rate hike. The bank's analysts believe that tighter monetary policy will temper the rally in the short run but not kill it.

The Fed raised rates on September 16, and Goldman economists now expect another increase in October. However, analyst Lina Thomas says much of the tightening cycle is already reflected in demand through exchange-traded funds (ETFs), which has softened as yields climbed and the dollar strengthened.

Thomas expects the central bank to cut rates three times between September 2027 and March 2028, leaving the terminal rate unchanged from earlier assumptions. This path supports the case for gold to 'grind higher in the near term.'