Goldman Sachs has lowered its end-2027 gold price forecast to $4,650 an ounce from $4,800 previously, citing a more challenging near-term outlook as expectations of further Federal Reserve interest rate hikes threaten to weigh on private investor demand for the metal.

The revised forecast represents a reduction of $150, or 3.1%, from its previous estimate. However, the bank still sees 16% upside from current spot prices by December 2027, as it expects private investor demand to recover once the Federal Reserve begins cutting interest rates late next year.

Goldman said it remained constructive on gold over the longer term, supported by structurally strong central bank purchases, including continued buying by China’s central bank.

However, the bank’s economists now expect the Federal Reserve to deliver a third 25-basis-point interest rate increase in March 2027, following a second hike expected in December 2026 that was already incorporated into its previous base case.

A rising federal funds rate is expected to weigh on private-sector investor positioning through early 2027, creating a headwind for gold despite continued central bank accumulation.

Goldman said it had adjusted its December 2027 price forecast lower in line with its previously outlined downside scenario, reflecting the prospect of tighter monetary policy for longer.

The bank expects private investor demand to recover once the Federal Reserve begins easing monetary policy in December 2027, removing an important constraint on gold prices and allowing investment demand to return.

This recovery, alongside continued structural central bank purchases, is expected to support gold’s advance to $4,650 an ounce by the end of 2027, Goldman said.