Gold hit a record high earlier this year as investors sought safety during the US-Iran conflict. But the picture has changed fast. Sticky inflation, a stronger dollar, and a more hawkish Federal Reserve have sent prices sliding.
Goldman Sachs analysts Lina Thomas and Daan Struyven revised their year-end gold forecast from $5,400 to $4,900 per ounce. They described their position as “structurally constructive but tactically cautious,” noting near-term risks to the downside.
The bank’s note, published Thursday, came shortly after the Federal Reserve decided to hold interest rates steady at its latest meeting.
US inflation rose to 4.2% in May 2026, above expectations. The Fed’s 2% target remains far off, and new chair Kevin Warsh signaled concern at his first meeting leading the central bank.
Warsh’s tone was described as “surprisingly hawkish” by Goldman analysts. Markets are now beginning to price in a possible rate hike later this year.
If the Fed does raise rates, Goldman warned gold could fall further — to $4,400 by year-end. The analysts said demand for gold as a policy hedge could “unwind more persistently” in that scenario.
Gold reached an all-time high of $5,626.80 in late January 2026. The surge was driven by the US-Iran conflict, which disrupted global energy supplies and sent investors toward safe-haven assets.
Since that peak, gold has fallen nearly 26%. The commodity was trading around $4,145 to $4,166 at the time of writing, depending on the source.
Spot gold was on track for a third straight weekly decline on Friday. Silver also dropped, falling 2.5% to $64 per ounce.
A US-Iran peace deal appeared possible after American officials said they lifted a blockade on Iran on Thursday. Oil tankers moved through the Strait of Hormuz as a result.
However, there are reports that Israel re-escalated tensions with Lebanon, which could derail any deal. A full breakdown in negotiations could revive safe-haven demand for gold.
Morgan Stanley also cut its gold target to $5,200, citing rising yields as a key pressure point.
Goldman still sees gold ending the year higher than current levels, even with the reduced target. But the path depends heavily on what the Fed does next.
Analysts expect near-term pressure to continue, with medium-term potential if macro conditions shift.
At press time, the SPDR Gold Shares ETF was reflecting the broader slide in bullion prices.
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