① Following Goldman Sachs and Deutsche Bank, another international investment bank has lowered its gold price target.
② BMO Capital Markets expects gold to average about $4,625 per ounce in the second half of this year, a 5% downward revision from its previous forecast.
③ BMO noted that as the market begins to actively price in the possibility of a rate hike before year-end, U.S. monetary policy remains the largest and most urgent threat to gold and silver prices.
BMO pointed out that as the market begins to actively price in the possibility of an interest rate hike before the end of the year, US monetary policy remains the biggest and most pressing threat facing gold and silver prices.
Although the Federal Reserve kept interest rates unchanged at its recent monetary policy meeting, it signaled at least one rate hike this year, as the Iran war pushed up energy prices and intensified inflation concerns. Federal Reserve Chair Kevin Warsh also emphasized his focus on stabilizing prices. Analysts said: “The Federal Reserve’s statement triggered a wave of market repricing, with the two-year US Treasury yield soaring 13 basis points, the largest single-day increase since April 2025, and the market also consolidated expectations for a 25 basis point rate hike before October.” BMO also said its economics team now expects the Federal Reserve to cut rates by 25 basis points in September and December 2027, respectively, which is nine months later than its previous forecast. “For now, rate cuts remain a distant prospect, and many economies are actually raising rates, which, other things being equal, acts as a macro-level restraining factor for metals.” Despite short-term risks facing gold prices, BMO believes that gold will continue to benefit from the global “de-dollarization” trend, and buying gold is often an important step in the de-dollarization wave. Gold price targets have been repeatedly lowered. Recently, several international investment banks have successively lowered their gold price targets. As investors become increasingly cautious about the outlook for US monetary policy and investment demand for gold cools, Deutsche Bank recently sharply lowered its gold price forecasts for the third and fourth quarters of this year, with a reduction of as much as 22%. Goldman Sachs Group late last week lowered its end-2026 gold price forecast by $500 to $4,900 per ounce, as the bank expects the Federal Reserve not to cut rates this year. In addition, Bank of America, UBS, and Morgan Stanley have also collectively turned cautious on gold. They believe that in the short term, gold prices are unlikely to rise significantly, downside risks have increased, and the difficulty of achieving established target prices has risen. As market expectations for a Federal Reserve rate hike heat up, overshadowing the support from softer oil prices after progress in US-Iran negotiations, international gold prices extended the previous day’s decline during Wednesday’s Asian session. As of press time, spot gold fell more than 1.02% to $4,068.36 per ounce. Gold prices have fallen about 28% cumulatively from the historical high of nearly $5,600 touched in late January this year.
