Goldman Sachs maintains $5,400/troy ounce end-2027 gold price forecast

Goldman Sachs kept its end-2027 gold price forecast at $5,400 per troy ounce despite the latest US interest rate increase, saying tighter policy is likely to slow bullion's rally but not derail it.

• Spot gold XAU= was up 0.3% at $4,353.65 per ounce, as of 0013 GMT. US gold futures GCcv1 fell 0.2% to $4,392.50.
• The Federal Reserve raised interest rates on Wednesday and flagged more hikes in the coming months, with new US central bank chief Kevin Warsh joining a unanimous decision.
• Goldman Sachs said in a note that it expects "the impact of tighter monetary policy to be felt primarily through a slower near-term appreciation path rather than a lower terminal gold price."
• Although gold is often seen as a hedge against inflation, rising interest rates can weigh on bullion demand by making interest-bearing assets more attractive to investors.
• Goldman Sachs said continued central bank diversification remains the main structural driver of its constructive gold view.
• It said a more hawkish Fed could trigger a sharper correction in gold, with prices potentially falling to around $4,070 if the US central bank delivers three more rate hikes this year and signals a higher terminal rate, before recovering to about $4,200 by end-2026 as continued central bank purchases support the market.