HSBC Trims Gold Price Targets Amid Near-Term Pressure
HSBC has reduced its average gold price targets for both 2026 and 2027, lowering them to $4,490 and $4,825 per troy ounce respectively. This downward revision comes as spot gold closed at $4,144.04 an ounce on Friday, down 0.8% on the day and 3.4% over the week.
The firmer US dollar and persistently elevated Treasury yields contributed to the decline in gold prices. Despite softer US economic data, including a cooler September payrolls reading and earlier inflation prints that came in tame, hopes of a Federal Reserve policy easing didn't hold gains, causing prices to fall further.
Institutional caution has shown up clearly in market data. Net long positions held by money managers fell to their lowest level since the end of July, according to CFTC figures, as traders trimmed their bullish bets. Gold ETFs have also been shedding metal, with outflows of 1.6 tons in the prior week bringing total global holdings down to 4,249 tons.
Physical demand has offered little support lately. China's buying interest ahead of its October holidays was noticeably weaker, and local premiums over the global benchmark faded to zero by the end of the previous week. Ghana's central bank is prioritizing rebuilding foreign exchange reserves, leading state gold buyer GoldBod to suspend exports since August.
Despite these near-term pressures, market watchers point to fundamental factors that should keep a floor under prices. Nicky Shiels at MKS PAMP attributes a significant valuation premium to ongoing geopolitical hedging and the diversification of sovereign currency reserves, valuing this premium at roughly $840 an ounce.