September Fed Decision Turns Gold Price Forecast into Coin Flip

The gold price has been trading around $4,430, $4,460 after Federal Reserve Chair Kevin Warsh delivered a hawkish speech at Jackson Hole. This has changed the reaction function and lifted rate-hike expectations, making a September hold odds a coin flip.

Before the speech, there was a 70% chance of a September hold, but now it's around 48-56%. The current spot price is roughly 3% below last week's high near $4,698. The Working consensus for year-end 2026 has shifted to between $4,500 and $4,900.

Goldman Sachs, J.P. Morgan, HSBC, UBS, Morgan Stanley, Wells Fargo, and BofA have all adjusted their targets, with most clustering around $4,500, $4,750. However, some banks still see the possibility of reaching $5,000 by year-end, but this is not considered the base case.

The World Gold Council's fair-value framework puts gold at roughly $3,895, $4,305, below where it trades today. This suggests that the current price already embeds a substantial risk premium.