Goldman Sachs has adjusted its year-end forecast for gold to $4,900, reflecting a downward revision of $500 from previous predictions. This change stems from the bank’s expectation that the US Federal Reserve will not implement interest rate cuts this year. The revised estimate suggests that further cuts may be delayed until March and December of 2027.
Gold has seen a significant decline of over 22% since reaching an all-time high of $5,327 per ounce in January. Currently, the price is perilously close to dropping below $4,000, a threshold not breached since November. Analysts from Goldman Sachs, Lina Thomas and Daan Struyven, noted that while their outlook on gold remains optimistic in the long term, there are immediate risks that could affect pricing.
Additionally, the ongoing conflict in Iran and a 4.2% annual increase in the US Consumer Price Index reported in May may pose challenges for both gold and cryptocurrencies like Bitcoin, which has decreased by 28.3% this year. Experts suggest that without a drop in inflation and a subsequent reduction in interest rates, the overall market sentiment towards these assets may not improve significantly.